Chapter 140: Acquiring a Stake

“As for expanding the Huakun Group, let’s put that aside for now.” Lu Kun thought for a moment, then slowly shook his head. “Huakun Group is already a major enterprise. Stability should be the guiding principle of the company’s development.

“We can’t act the way we did in the beginning, when we had nothing to lose and feared neither heaven nor earth, thinking that even if everything went wrong, we could simply start over.

“Take Nian Yangu, the King of Foolish Melon Seeds. He thrived during the early days of reform and opening-up, so why did he eventually sink beneath the waves of commerce and never manage to rise again? Meanwhile, later arrivals such as Three Squirrels, Bestore, and Be&Cheery overtook him?

“For a large enterprise, business strategy is of paramount importance. One careless move, and the whole company could capsize.”

“But, boss…” Sun Bowen found it difficult to understand.

At present, the entire management team was rubbing its hands in anticipation, already imagining which direction they should expand in after conquering the retail market of Angui’s last prefecture-level city.

If they pursued stability above all else, the company’s current drive and vitality could easily dissipate.

Once people grew accustomed to a comfortable working environment, reigniting the management team’s fighting spirit would be extremely difficult.

“There is no ‘but.’” Lu Kun frowned slightly but patiently explained, “Huakun Group’s most important task right now is to seize the retail market of that last prefecture-level city with all our strength, then quickly consolidate our market foundation and prepare for the future invasion of outside capital.”

“An invasion by outside capital?” Sun Bowen’s heart jolted. After pondering for a moment, he shook his head. “Impossible.”

“Oh?” Lu Kun was somewhat surprised.

“Boss, Huakun Group has already completed its overall layout of Angui Province’s retail market, so to speak. If outside capital wants to enter the province and compete with us for market share, it would clearly lose more than it gained.

“If they launched a price war, Huakun Group wouldn’t be a pushover either. To tear through the lines of defense we’ve established, they would have to spend an astronomical sum. The investment and expected future returns clearly wouldn’t be proportional.

“As for breaking through from within, that’s even more absurd. The retailers in Angui Province that have achieved any real scale have either been driven into bankruptcy by Huakun Group or acquired by us…”

Sun Bowen’s analysis was logical and well organized.

Lu Kun secretly nodded.

Unless outside capital poured in several hundred million, there was no way it could pry open the door to Angui Province’s retail terminals.

“The key is that our company doesn’t have that much money available for expansion.” Lu Kun took a sip of hot tea and spoke only after Sun Bowen had finished analyzing the situation.

“How could we not? Uh…” Sun Bowen seemed to realize something. His face twisted as though he were constipated, and he swallowed the rest of his sentence.

“Boss, you’re not planning to transfer Huakun Group’s funds away soon, are you?” Sun Bowen asked, his face darkening.

“Mm.” Lu Kun gave a pleased little hum.

Ever since Lu Kun had separated all of Huakun Group’s stores from the group, the company had been paying rent every month to a real-estate shell company newly established by him.

Previously, the company had retained those rental payments under the guise of corporate loans.

Now that Lu Kun wanted to transfer the funds away openly and legitimately, no one could say a word about it.

A huge portion of the massive cash reserves currently sitting on Huakun Group’s books would probably be withdrawn.

With insufficient funds, even if management wanted to make bold moves, there would be nothing they could do.

“Then… then are we supposed to do nothing at all?” Sun Bowen forced himself to object.

Lu Kun frowned and said irritably, “Didn’t I just tell you to consolidate the market foundation?”

“How are we supposed to consolidate it? Our market share is already number one.”

Sun Bowen looked utterly bewildered.

“The documents I had someone deliver to you yesterday afternoon—you haven’t read them yet?” Lu Kun asked, frowning.

“Yesterday…” After thinking for a while, Sun Bowen finally guessed which documents he meant.

“Oh, come on, boss. Think about what time it was when you had someone deliver those documents yesterday. Today is only our first day back at work, isn’t it?” Sun Bowen’s mouth twitched, and his expression carried a hint of grievance.

“Ahem.”

Lu Kun remembered that he had not gotten up from his afternoon nap until after three o’clock the previous day.

When someone from the company delivered the documents, he had casually asked them to take a development plan to Sun Bowen as well.

It was understandable that Sun Bowen had not read it yet.

“Then should I go back and take a look first?” Sun Bowen ventured.

“No, no. I’ll just explain it to you directly. This time, I won’t withdraw all the funds from Huakun Group’s accounts at once. I’ll leave some behind to strengthen the group’s core capabilities. Here’s what we’ll do…”

Lu Kun spoke at length, and the more Sun Bowen listened, the brighter his eyes became.

“I never knew we could do it this way!” Sun Bowen sprang to his feet in astonishment.

“Basic operations, basic operations. Don’t get excited yet. Sit down and listen to me.” Lu Kun waved a hand, signaling him to sit.

…

“Boss, once we do this, Huakun Group’s profit margin will be even greater!”

Sun Bowen no longer wore his lifeless expression from earlier. His large eyes now shone with excitement.

“Heh heh…”

The two men exchanged a glance. Two lecherous chuckles drifted out of the office. A male employee passing by outside suddenly felt his backside tighten for no apparent reason. Not daring to think too much about it, he ran away as fast as his legs could carry him.

…

“Boss, shall I go back and assign the tasks to everyone?” Having learned Huakun Group’s next development plan from Lu Kun, Sun Bowen was so excited he could barely contain himself.

“Mm. First, read through the documents I had delivered to you yesterday carefully. Also, leave the matter of investigating potential equity investments to the inspection and evaluation team. They’re the professionals when it comes to this,” Lu Kun instructed.

“Got it. Please rest assured, boss. I guarantee I’ll complete the task.” Having received his orders, Sun Bowen happily returned to his office to get to work.

What Lu Kun had Huakun Group do this time actually went somewhat beyond the scope of retail. It looked more like the work of an investment firm.

However, taking stakes in small workshops and factories would not only strengthen the ties between suppliers and distributors and build closer partnerships, but also allow everyone to achieve a win-win outcome.

Lu Kun had long coveted the rich rewards sitting in the bowls of Huakun Group’s suppliers.

Most of those people had originally been small workshop owners. As Huakun Group expanded explosively, they had benefited greatly as well.

Lu Kun had heard of one small rice-milling workshop that originally consisted of just two people and a single machine. Thanks to the steady increase in orders from Huakun Group, it had now grown into a “large factory” with fifty or sixty employees and more than a dozen rice-milling machines.

Once a pig has been fattened, naturally it must be slaughtered.

This was an open strategy. If they agreed to let Huakun Group take a stake, then everyone would benefit, and the orders would naturally continue.

If they refused, that was fine too. They could part on good terms and find another partner.

Of course, transforming their businesses would take time. In Angui Province, any company capable of taking over their output would probably have to dredge the bottom of the sea to find one.

Without Huakun Group’s orders, these factories that had grown by relying on the group for so long would either have to change industries or be reduced to their former state.

————————————

P.S. I’m back. We went together to see A Dog’s Purpose 2, then happily found a small guesthouse and rented a room.

Don’t ask why we didn’t go to a hotel!

Naturally, it was because we didn’t have enough money.

…

Damn it!