Maximize Interest, My Money Grows Infinitely

Mei Xiang took a deep breath, "Director Guo, based on the scarcity and strategic value of niobium ore resources, as well as our mature system in mining operations, I believe that Xingye Trading should hold a 70% share in the profit division."

Guo Huaian heard this and slightly frowned, showing a trace of difficulty on his face.

He was silent for a while, "President Xingye, a 70% profit-sharing ratio is indeed quite high. As I mentioned earlier, we require a significant amount of funds and energy in technology development, equipment investment, market expansion, and the risks involved are not to be underestimated."

"At this rate, we really might not be able to proceed," he added.

Mei Xiang was eager to make a move, but considering her own interests were at stake, she was also reluctant to concede.

Chen Cheng had been silently listening to the negotiations between the two parties, and at this moment, he coughed, breaking the brief deadlock.

"Director Guo, President Xingye, I think both of you have presented very reasonable viewpoints from your respective positions. Perhaps we can look at this issue from a different perspective."

Guo Huaian and Mei Xiang both turned their gaze to Chen Cheng, their eyes full of anticipation.

Chen Cheng continued: "Our cooperation this time aims to build a niobium ore industry chain with long-term competitiveness. From the mining of niobium ore to subsequent product development, production, and sales, each stage is crucial."

"The technology, equipment, and market channels mentioned by Director Guo are indeed the core advantages of Xin Neng, while Xingye Trading's high-quality niobium ore resources are an indispensable foundation."

Chen Cheng paused briefly, his gaze swept over the faces of the two, "I have a proposal, perhaps a dynamic adjustment mechanism can be adopted for the profit-sharing."

"Dynamic adjustment mechanism?"

Chen Cheng nodded, "President Xingye's flat transfer fee is 47 billion RMB."

"Then we divide this amount into three phases, setting the profit-sharing ratio for each phase accordingly," Chen Cheng continued methodically:

"In the first phase, from project launch to pre-production, during this phase Xin Neng needs to invest heavily in infrastructure construction, equipment purchase, and setup, while a professional team is assembled for technology development and preparation work.

Given this, Xingye Trading's profit-sharing ratio can be set at 40% for this phase, with Xin Neng holding 60%. And 10 billion out of the 47 billion transfer fee is paid in this phase."

Guo Huaian felt a tingling of unease in his heart.

Mei Xiang was slightly hesitant about the share division, but considering her own relatively low early-stage investment and the ability to obtain 10 billion funds, she reluctantly accepted.

Chen Cheng continued: "In the second phase, the first three years from the start of production, during this period, Xin Neng's technical advantages will gradually transform into productivity, products will begin entering the market, brand building and market expansion will be fully underway.

At this time, Xingye Trading's share ratio increases to 50%, with Xin Neng also holding 50%. The 20 billion transfer fee is paid over three years in this phase."

Upon hearing this, Mei Xiang's expression brightened, as it meant she could obtain more considerable returns once the project entered the profitability track.

Guo Huaian quickly calculated in his mind, weighing the input-output ratio for this phase, feeling greater pressure.

"As for the third phase,"

Chen Cheng emphasized, "After three years from production, if the project operates well, market share steadily expands, and niobium ore products possess strong competitiveness within the industry, then Xingye Trading's share ratio can be increased to 60%, with Xin Neng at 40%. The remaining 17 billion transfer fee will be paid annually based on operation conditions."

He smiled, "Once this 47 billion is fully paid, whether it's a 70:30 share, 60:40 share, 50:50 share, or any other ratio, we can renegotiate."

"Of course, if Xin Neng can pay off the 47 billion RMB transfer package fee in one go, I would assume President Xingye would not be fixated on the share ratio, right?" Chen Cheng looked at Mei Xiang.

Mei Xiang nodded, "Yes, Mr. Chen has expressed my intentions."

Director Guo frowned even deeper after hearing Chen Cheng's suggestion.

Indeed, the phased ratio approach might resolve some immediate profit distribution conflicts, but for Xin Neng, the pressure on cash flow remains a huge challenge.

He was silent momentarily, then slowly opened, "Mr. Chen, your suggestion is quite innovative, considering the characteristics of different project phases and the interest demands of both parties.

However, the shock on the financial chain for Xin Neng from taking out 47 billion at once is too massive; our current financial reserves and plans hardly support such a move."

Guo Huaian sat up straight, "Moreover, regarding whether the ore reserves of Xingye Trading can support the full 47 billion payment calls for a big question mark."

He forced a smile, "You know, the performance of such bulk commodities in the futures market, price fluctuations are like a roller coaster.

If niobium ore prices drop significantly in the next few years, even following your planned share ratios, our revenue would hardly cover the exorbitant early investments, let alone pay the 47 billion transfer fee."

Chen Cheng remained calm, "Regarding ore reserves, Director Guo, you may send a team to conduct on-site verification. Just now, President Xingye has already said they will fully cooperate with you."

He continued, "As for swinging transaction prices, but looking at it from another angle, fluctuations imply opportunities and also conceal risks; the key is how we manage them."

"Therefore, I propose we establish a price risk sharing mechanism."