Chapter 77
Translator: Dreamscribe
“......I’m not seeing this wrong, am I?”
“You’re seeing it correctly, Chairman. These are our Kwangwoon Group’s quarterly profits.”
Usually, conglomerates receive dividends from their affiliates once a year.
That’s because it’s easier to calculate and the most common method.
But financial holding companies were a different story.
Especially for Kwangwoon Group, since the securities firm was its core, the cash flow had to be very fast, so profits were distributed quarterly.
“No, how can a number like 3 trillion won come out?”
Quarterly profit of 3 trillion won.
The total revenue was far greater than that.
“Netflix earned over 1 billion dollars in net profit just this quarter. Nearly half of that has to be given to our Kwangwoon. On top of that, our KW Exchange earned 1 billion dollars as well, due to a surge in new users caused by server issues at other exchanges.”
Though Netflix is not an affiliate directly controlled by Kwangwoon Group, Kwangwoon Securities currently holds a 40% stake in it.
That side has large revenue, but with high production costs, marketing, and various other expenses, the net profit was not as high as one might expect.
However, the exchange business was different.
If enough people gathered, there was nothing easier to make money with.
During the Bitcoin craze, countless exchanges were born and raked in fortunes.
But due to trading suspensions at other exchanges caused by server issues, people flocked to KW Exchange, and as a result, it achieved a staggering 1 billion dollars in revenue.
“It was CEO Jung Jin-ho’s foresight that was decisive. When we launched KW Exchange, I thought maybe the servers were being overbuilt. But that became a critical factor in today’s growth. Other exchanges are in a situation where they can't even execute buy or sell orders, but our exchange is incredibly stable.”
What was frightening was that KW Exchange’s growth was only just beginning.
Bitcoin, which was expected to fade away after a short boom, had now surpassed the price of 3,000 dollars.
There were already internal evaluations suggesting that it could hit 10,000 dollars within the year.
Moreover, altcoins were being launched endlessly, and companies that initially ignored the Bitcoin craze were now gradually starting to show interest in coins.
Their goal was to create and sell their own coins.
They say it’s important to be the first to secure a position and build monopolistic influence. KW Exchange stood right at the center of that.
Even if the server issues at other exchanges stabilized in the future, KW Exchange had already absorbed the vast majority of users long ago, and as long as Bitcoin kept growing, KW Exchange could just sit back and collect transaction fees from its members.
Just as everyone had evaluated, rather than buying Bitcoin directly, owning the world’s largest exchange was far more profitable.
“But our real source of income is right here. The shipping business. As our Kwangwoon started to dominate the global shipping industry, our profits skyrocketed.”
Kwangwoon Shipping had always been profitable.
But as it acquired other struggling shipping companies one after another, its scale grew to an unbelievable level.
Kim Doo-young, who had been appointed as the CEO of Kwangwoon Shipping, purchased any decent-looking assets without hesitation, and as a result, Kwangwoon Shipping had grown considerably in size.
And that too, in a very short period of time.
Kim Doo-young expressed his ambition to increase the number of operating ships to nearly 500 by early next year.
At the current pace, it seemed entirely possible.
“It was thanks to following CEO Jung Jin-ho’s suggestion to stockpile a large amount of oil.”
Thanks to purchasing and storing oil worth hundreds of billions in advance, Kwangwoon became the company that dominated the shipping industry.
By investing just a few hundred billion won, they had created a company generating tens of trillions, no, even hundreds of trillions.
“If our quarterly net profit is 3 trillion won, where does that place us in the national rankings?”
“We’d be at least 3rd place. Kangseong, which hit an all-time boom this time, surpassed 15 trillion won. As for Daekwang Motors in 2nd place, I’m not sure of the exact figure yet, but it should be around 3 to 4 trillion won.”
Kwangwoon Group has not even reached its first anniversary yet.
And yet, they were reporting 3 trillion won in quarterly profits.
It wasn’t even that they had a huge number of affiliates.
They had simply selected only the most profitable ones and nurtured them to growth.
“Chairman, what should we do with this money......?”
“Well, does anyone have a good use for it?”
“If any of our affiliates are struggling financially, we can help through investments...... but truthfully, there’s nowhere that needs money right now.”
While other companies were in emergencies, unsure of where to plug all the financial holes, Kwangwoon was the complete opposite.
AMD, which was expected to consume the most money, was in the process of building a factory in cooperation with Kangseong, and now with NK joining in, AMD was about to receive additional technical support.
Moreover, the major players were even supporting it financially on their own, so AMD was practically dominating the market without much effort.
The shipping business was the same.
Only a portion of the incoming profit was allocated toward further acquisitions of shipping companies, and the rest wasn’t needed anywhere.
In other words, even though they were making a ton of money, there was no place to invest it immediately.
But as a former securities firm CEO, just letting the money pile up wasn’t an option.
Letting money earned just sit and gather dust would be nothing short of a major sin.
“Then there’s only one answer. Leave all decisions on how to manage this money to CEO Jung Jin-ho.”
There was no need to deliver this money directly to the securities firm.
Just as all the money flowing into the securities firm was being handled by Jung Jin-ho, all the funds coming into the holding company through affiliates would also be managed by him going forward.
‘What is Jin-ho going to do this time.......’
Honestly, now it was impossible to even imagine.
He had bought oil in advance with several hundred billion won and built a giant shipping company from that. Using it as a stepping stone, he pressured TSMC and was now swallowing up the semiconductor market.
And that wasn’t all.
By triggering server issues during the semiconductor crisis, he instantly made KW Exchange the global number one exchange.
And each of those companies had achieved explosive growth.
In other words, the 3 trillion won was only the beginning.
'Was it a company that surpasses nations?'
Suddenly, the words Vice President Kang Ji-hwan once said came to mind.
A global company even a nation cannot control.
A hidden power that dominates the global economy.
Mega-corp.
That was Jung Jin-ho’s ultimate destination.
***
“CEO-nim. I’ve brought the report you requested last time.”
“Oh my. Is that the report on Midnight Snack Nation? I ordered a salad from them just last night.”
Midnight Snack Nation.
Last year’s revenue: 85 billion won. Operating profit: 3 billion won.
That was a 70% increase in revenue compared to the year before.
Moreover, this year, revenue was expected to exceed 150 billion won.
Also, the total transaction volume processed through Midnight Snack Nation in just one year had surpassed 1.8 trillion won.
That indicates the delivery market through the platform was growing immensely.
“CEO Lee Beom-jun had a huge influence on this growth trend. He raised investments from various sources starting with Gold Reagan, and expanded the scale rapidly through aggressive marketing.”
When receiving the report on Midnight Snack Nation previously, it hadn’t left much of an impression.
That was probably due to CEO Lee Beom-jun.
Someone needed to take the lead and actively grow the company, and that was exactly what Lee Beom-jun did.
The fact that my intuition is only coming now, what does that mean?
It meant that the company had gained growth momentum, and now was the perfect time to jump in.
“Apparently, a foreign company tried to acquire Midnight Snack Nation recently. They reportedly offered about 300 billion won. But CEO Lee Beom-jun rejected it.”
“So he’s asking for a higher price?”
“Since Midnight Snack Nation is a representative domestic delivery company, CEO Lee even did an interview saying he’d never sell it to a foreign firm.”
“So it’s not about the price?”
“To be honest, that’s just how it sounds. Of course it’s about the price. Running and buying and selling companies isn’t something that should involve patriotism, is it.”
Now that it was said out loud, it made sense.
How many businesspeople would sacrifice profit for patriotism?
These people don’t care about the nationality of money.
“Besides, there’s that saying, right? When a negotiation isn’t going well, try throwing more money at it.”
If it’s not an amount that’s hard to refuse, he won’t sell?
“He recently stated again that he has no intention to sell. And he also mentioned that he’s looking to receive more investment from other companies. From what I’ve heard, Naver, the No.1 portal site in our country, is planning to invest around 70 billion won.”
“But the problem is competitiveness. Sure, Midnight Snack Nation is currently the No.1 delivery app in the country, but other competing apps are rising fast. It’s a world where you never know when the tables will turn.”
And yet, the fact that my instincts responded to this suggests that Midnight Snack Nation will show overwhelming growth going forward.
“If we were to attempt an acquisition, how much would we need to spend?”
“CEO Lee Beom-jun doesn’t hold all the shares. Several investment firms are mixed in, so acquiring the entire stake would result in significant price volatility. Considering all that, and estimating based on the current market valuation of Midnight Snack Nation...... it would be about 400 billion won. So that company that offered 300 billion wasn’t too far off in their valuation.”
300 to 400 billion.
That was our company’s valuation of Midnight Snack Nation.
But that price didn’t feel right.
Naturally, CEO Lee Beom-jun wouldn’t be willing to sell at that amount.
Hadn’t he already rejected a 300 billion offer?
“.......”
I began writing increasingly higher amounts in my notebook.
The rising figures eventually stopped at a certain line.
I worried whether it might be too ridiculous an amount.
‘......It’s not as bad as I thought?’
***
Vice President Kang Ji-hwan arrived at the meeting place and cleared his throat.
The counterpart was already waiting inside the room.
“Nice to meet you. I’m Vice President Kang Ji-hwan.”
“Ah, yes. I’m CEO Lee Beom-jun.”
Lee Beom-jun had agreed to the meeting, but his expression showed he had no idea why Kwangwoon was suddenly showing interest in his company.
“I’ve heard a lot about Kwangwoon. It’s the hottest group in Korea right now. And you’re saying such a company wants to invest in ours?”
“Does it make you uncomfortable?”
“Well... actually, Naver has already promised to invest 70 billion. So accepting more investment right now would be a bit...”
“I see. But we’re not here to invest.”
"What?"
“Kwangwoon is here today to meet you directly, CEO-nim, in order to acquire Midnight Snack Nation.”
CEO Lee Beom-jun showed a briefly surprised expression, then quickly returned to a firm look.
“I’ve received acquisition offers several times before. I’ve rejected them all. I have no intention of selling Midnight Snack Nation.”
“How much did those companies offer?”
“The highest was about 400 billion.”
400 billion.
It was, in Vice President Kang Ji-hwan’s view, the perfect amount.
But to think he had turned that down.
Is he simply greedy, or is it a matter of personal conviction?
If it were Kang Ji-hwan, he would never offer more than 400 billion.
Even based on operating profit alone, offering 400 billion was already generous.
The problem was, the decision on the investment wasn’t Kang Ji-hwan’s to make, but rather the CEO of Kwangwoon Securities, Jung Jin-ho.
“800 billion.”
"......What?"
“That is the acquisition amount Kwangwoon is offering you, CEO-nim.”
“!?”
Kang Ji-hwan did not miss Lee Beom-jun’s expression.
The man couldn’t hide the twitch at the corner of his lips.
So, it wasn’t that he wasn’t selling out of conviction.
It was simply that the offers had been too low.
“Ahem. Th-that’s very sudden. I’ve said I have no intention to sell......”
“Well, that’s unfortunate then. There’s nothing more to discuss with someone who has no intention of selling.”
As Kang Ji-hwan stood up from his seat, Lee Beom-jun flinched and quickly grabbed him.
“Geez. You’re quite hasty, aren’t you?”
“CEO-nim, with all due respect, everyone at our securities firm operates on a schedule broken down to the second. Time is money. If you can’t clearly express your intent to proceed, then I can’t afford to waste any more of my time.”
“......What I meant when I said I wasn’t interested in selling was directed at foreign companies. Kwangwoon is a proudly domestic company, isn’t it? With solid credibility, too.”
Kang Ji-hwan sat back down.
“I’ve brought a draft of the contract. Would you like to take a look?”
“I’ll need to glance through it here and then discuss it with the legal team......”
“We’ll give you until tomorrow. If we don’t hear back by then, we’ll consider the deal off the table.”
“Ah. That should be plenty of time. But there are a few companies that have already invested in our business, so if you intend to resolve those shares too, additional negotiations may be required.”
“We’ll handle that ourselves. As long as you, the majority shareholder, make a decision, that’s all we need.”
There was absolutely no reason for CEO Lee Beom-jun to refuse.
He was being offered twice the valuation, selling a company worth roughly 400 billion won for 800 billion.
In an uncertain battlefield like the delivery app war, being able to cash out for that much was a golden opportunity no one in their right mind would refuse.
Just looking at CEO Lee Beom-jun’s beaming face as he held the draft contract said it all.
‘But... is this really going to work out?’
Sure, people were ordering delivery more and more these days.
But could this really generate value exceeding 800 billion won?
***
“Did you screw up another business this time?”
“Aigoo. Hyung-nim, you’re worrying over nothing again.”
“It’s not for nothing, you idiot. Our retail sector’s profits are in the red right now.”
“That’s right. Kangseong Electronics is soaring, and even our department stores are doing great. So what’s going on with retail?”
Kang Sung-ho and Kang Mi-ra were scolding their youngest brother, Kang Soo-ho.
“Tsk. It’s all because of this so-called e-commerce. Everyone in the country used to shop at Kangseong Mart, but now they all just order online.”
The world had changed drastically.
No, in fact, it was constantly changing.
And at the center of it all was that small mobile phone.
It’s no exaggeration to say most people’s lives now revolve around their smartphones.
Where once everyone went out to the mart to shop, now all it took was a few taps to have it delivered.
“Especially that damn Lupang. They’re the problem. They just secured another round of massive foreign investment and are planning to roll out express delivery. Order today and they guarantee delivery of fresh products the very next day.”
“Is that even possible?”
“Told you already. They’re building warehouses everywhere using the enormous capital they got from Japan’s Hard Bank. They plan to use those as hubs to offer nationwide express delivery.”
Right now, the e-commerce market was experiencing explosive growth.
It was the era of internet shopping.
The problem was, it was a game of chicken.
Only one.
Only one player could survive this brutal game.
“We’re scrambling to get ready too.”
“Do you even have a chance? Can you beat Lupang at this?”
“These bastards play dirty. They secure massive funding with no trouble. Their headquarters is in the U.S., but they receive all their investment from Japan, and they completely bypass Korean regulations. Their founder holds less than 9% of the shares, yet he controls 70% of the voting rights.”
That kind of setup would be impossible in Korea, but by incorporating in the U.S., companies like Lupang could create special stock structures that inflate their voting power.
In other words, with just 1% ownership, one could control the entire company.
Lupang was fully leveraging that advantage to continue drawing in foreign capital.
“So if hyung could make an investment, your little brother will do his best. Hehe. I heard Kangseong Electronics is killing it these days.”
Kang Sung-ho furrowed his brows.
Entrusting money to this guy was worse than handing a fish to a cat.
“Oh right. Come to think of it, didn’t Kwangwoon just acquire Midnight Snack Nation? That delivery company, for 800 billion won?”
At Kang Mi-ra’s words, Kang Sung-ho nodded.
“I heard about it too.”
They acquired a company not even valued at 400 billion, for twice the price.
It was honestly a deal that was hard to understand.
“Was that Jung Jin-ho guy behind it too? I heard Kwangwoon is making a ton of money these days. But isn’t that guy just burning cash out of arrogance?”
Kang Sung-ho’s eyes flashed with fury.
“Hey. Watch your mouth.”
“......Huh?”
“He’s not someone you can just badmouth like that.”
“.......”
At the terrifying look on his older brother’s face, Kang Soo-ho slowly nodded, his expression stiffening.
“If you ever run into that guy, be careful not to say anything foolish. He may be younger than you, but don’t you dare treat him carelessly. Got it?”
“Y-yeah.......”
The mood suddenly turned ice cold.
The youngest knew full well that his oppa was crazy about Jung Jin-ho, and yet he had to go and provoke him for no reason.
“Oppa. Isn’t Yoo-jin working in the retail division?”
Kang Mi-ra spoke up to change the mood.
“So?”
“Remember last time? You said Ji-soo was pretty and good at her job, and you hoped she could get matched up with Jung Jin-ho.”
“But what can we do if he doesn’t want to meet her?”
Truth was, they had tried setting it up a few times, but Jung Jin-ho always turned them down.
“That’s because you’re trying to force a blind date. What about letting them meet through business? Since Kwangwoon just acquired a delivery app, doesn’t that mean they’re starting to show interest in the retail sector too? They call it delivery mediation, but if they develop it properly, it could be the very system Lupang needs for nationwide rapid delivery. So I think a collaboration between the two companies wouldn’t be a bad idea. And that can be the excuse to get the two of them to meet.”
At that, Kang Sung-ho adjusted his posture.
“Tell me more.”
“Uh...?”
Honestly, she had just brought it up to shift the atmosphere.
“Y-you’re really going to do it?”
Kang Mi-ra was taken aback because her oldest oppa was now being way too serious.
*****
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