"Brother Luo Feng, let’s discuss the Rich Source Gold Group first before we decide whether to take action," Li Bo Kai said, quickly moving on to the day’s topic.
"No problem, go ahead," Luofeng nodded.
Chen Dali spoke first. "This group is an unlisted private company with an estimated value of about 22 billion. It’s currently performing very well in the market, positioned in the mid-to-low end segnt where it holds a high market share. According to data from third-party statistical organizations, last year, the group’s total sales were about 16.5 billion, with net profits exceeding 1 billion."
There was no question about the profits. The mid-to-low end segnt of the gold market doesn’t yield profits as high as high-end gold jewelry.
"Since the group isn’t listed and the gold market is very stable, with hundreds of physical stores and the group’s substantial size, we can’t use the stock market against them, nor can we win through offline competition," Chen Dali continued.
The implications were clear: being unlisted, the stock market was not an option. Gold prices? How could they be manipulated? With nurous stores, offline competition was futile. So, what then? The group seed impregnable.
Li Bo Kai added, "I ntioned in the group chat before that this company has a powerful ally. It wasn’t appropriate to say it directly in the chat, given internet filtering. What I an is, if anything happens to this group, the Capital City Comrcial Bank will do everything in its power to help them."
Lin Xiaoyun nodded. "The Chen Family has a notorious reputation in Capital City circles. However, with the backing of the Golden Group and the bank, they’ve managed to not only survive but thrive. I heard that this year, the Golden Group plans to expand to 500 stores!"
So, having a bank as their backer was truly aweso.
You could say that in this poker ga, the Chen Family started with a pair of jokers, four 2s, four Aces, and a sequence from 3 to K. And they were the ’landlord.’ With such a hand, how could they possibly lose? And when Luofeng faced such a hand, how could he win? The answer was simple: he had to step outside their established circle.
This group, within its own field, was as solid as a fortress, having sealed off all its weaknesses. Even if the rules of the ga were broken, the Chen Family could imdiately provide protection. aning, if a corner of their fortress wall crumbled, they would just patch it up. Moreover, the Chen Family would also break the rules to deal with Luofeng.
The key issue was that if Luofeng broke the rules first, the families of the three brothers, constrained by moral obligations, would be very unlikely to retaliate in kind. The Chen Family would use Luofeng’s transgression as a pretext to morally blackmail the three families.
"Let tell you a story," Luofeng smiled and began. "In Shuangqing, there’s a motorcycle company that used to be a national leader—first in market share, first in sales, with peak annual profits of five to six hundred million."
"Oh? Lifan Motors?"
"Yes!" Luofeng nodded. "At the ti, they were far ahead with their patents, and their engine technology was very advanced. Although the motorcycle industry faced restrictions due to certain policy adjustnts, they had import and export licenses and achieved excellent marketing results overseas. However, they veered off course and insisted on entering the automobile industry."
Luofeng sighed. "Sotis, sothing might appear unbreakable, but if it begins to collapse from the inside..."
Chen Dali understood. "So, we’re to start from within the Chen Family?"
"You ntioned earlier that the bank would offer die-hard support, right?" Luofeng asked.
"Yes," Chen Dali nodded.
Li Bo Kai said, "During the 2008 financial crisis, when the group faced a cash flow shortage, that bank directly lent them 3.5 billion at an extrely low interest rate to help them weather the storm."
Lin Xiaoyun added, "Back then, obtaining a nine-figure loan from a bank involved not only high interest rates but also various stable projects as collateral—let alone a ten-figure loan."
"That’s precisely the issue," Luofeng smiled. "I’ve looked into the developnt history of this Golden Group. They established a stable partnership with the bank very early on."
"So that’s why everyone suspected their relationship was very strong," Chen Dali remarked.
"I actually did a more thorough investigation. When the group was first established, the Chen Family’s financial situation was quite average. But in the initial phase, they underwent rapid developnt, opening fifty stores nationwide in just one year," Luofeng said. He continued, "That’s equivalent to opening one store a week! For the newly established Rich Source Gold Group, the financial pressure must have been imnse. Where did they get the money?"
The others were montarily stunned.
Luofeng went on, "After the first year of developnt and two years of consolidation, the group began an even more aggressive expansion in its third year, continuously opening over twenty new stores annually. At such a pace, how could their own financial resources support this? Could it be that the bank was providing them with loans every year?"
"That seems unlikely, right? No matter how good the relationship, a bank isn’t a charity. They’re best at offering an umbrella on a sunny day and snatching it back when it rains. When you genuinely need a loan, they won’t give it; when you don’t, they’re eager to lend to you," soone comnted.
Chuckles went around. "Poignant. That’s exactly what banks are like."
"Does that an there’s so kind of financial entanglent between them?" Lin Xiaoyun asked.
Luofeng smiled. "Whether there were any vested interests involved, I haven’t found out yet; an investigation like that would be very difficult. But I have discovered why the bank would support the Golden Group’s developnt."
"After all, such year-after-year support, no matter how good the relationship, would require a legitimate reason, right?" Luofeng said with a smile.
"Yes, absolutely!" Chen Dali nodded.
"They’ve always handled this discreetly. Only a few people in the insurance industry and at the Banking Supervision Committee know the real story," Luofeng stated.
"From its inception, the group has used gold as collateral to obtain lines of credit from the bank, thereby using the bank’s funds for rapid expansion," Luofeng explained.
"Um, this... this thod seems to be a common practice in the gold industry, doesn’t it?" Chen Dali asked.
"But what if the gold was fake?" Luofeng revealed, stating the most critical secret.
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