Chapter 388 190 billion US dollars?
At 5 am on May 28, He Zhongqiu and Wellington Philip went to the airport to pick them up.

Yang Xue and the twins came, and they were accompanied by Luo Chaoyi, the director of the track and field center, and Xia Song.

Yang Xue also brought twelve people, including three assistants including Zhou Qing, one lawyer and one accountant, three nannies, one nurse and one doctor, and two security personnel.

Xia Song also brought three people with him. This was the team he prepared for the listing of the martial arts school.

It's just listed in the United States, so the real listing operation team has to be set up in the United States, and he and Yang Xue's team are only responsible for supervision.

The group came out through the VIP channel and He Zhongqiu was waiting outside.

"Sister Xue."

"Three pounds."

Yang Xue is a little thinner than when she gave birth, so she must have done some body management. But she is in good spirits, and her energy and blood have recovered.

"Director Luo, Brother Xia, hello."

"Mid-Autumn Festival."

He greeted the others for a while.

"Come, Xiaoxue, Yangyang, daddy will hold you."

He Xue and He Yang were held by their nanny. They were two months old and full of energy, but they couldn't speak yet. When they saw He Zhongqiu, they seemed to recognize him and both stretched out their little hands.

"I'm afraid they don't recognize you, so I let them see your photos every day." Yang Xue said with a smile.

He Zhongqiu held one in each hand, and having two babies in his hands made him more satisfied than winning three consecutive championships.

"Let's go and eat first."

He said hello and walked towards the parking lot carrying the two babies, and the others followed.

After getting in the car, Yang Xue carried He Yang over and said, "Sanjin, Uncle Han has officially decided to invest 300 million RMB in Havoc in Heaven, and Guoying will invest 200 million. We will cooperate as a three-party company."

"The film can only be shot in 09 or after the 08 Olympics," said He Zhongqiu.

Yang Xue said: "That's no problem. The preliminary preparations alone will take a lot of time. Wu Yusen's Red Cliff has been prepared for several years and is only now being finalized.

By the way, I plan to let our own company produce the special effects for this movie. What do you think? In one or two years, I think the company's special effects production technology will be mature.

The production cost is several tens of millions of dollars. If we produce it ourselves, we can save at least half of the money, and half of the money we spend will go into our own pockets. "

"Sister Xue, please communicate with Uncle Han and the others first."

He Zhongqiu had no objection. Wasn't it for today that they spent $1.5 million to set up a special effects company?
He had already booked a private room in Chinatown for two large tables, and the food started being served when he arrived.

Luo Chaoyi impatiently took out two pieces of paper, handed them to He Zhongqiu and said:

"Mid-Autumn Festival, this is the schedule of all domestic and international track and field competitions from June to October this year. Take a look first."

"You should first run a good result in China. These events are recognized by the IAAF. As long as you get an A standard, you can participate in the Olympics."

“Once you have the results, you can sign up for international competitions.”

"Let me see."

He Zhongqiu looked at it.

The events that Liu Xiang participated in are marked above. There was only one in the first half of the year, three in the second half, and four in a year, which is not too many.

As far as he knew, Liu Xiang only ran nine races last year. It seemed that what he was told last year had worked. He didn't run much in the first half of this year, which would be very beneficial for his recovery from his injury.

He discussed it with Luo Chaoyi, who gave him some suggestions. He then made a choice based on his own schedule and chose the National Track and Field Championships which would start on August 8 as a domestic competition.

国际大赛方面，选了8月25号开始的大阪世界田径锦标赛，9月7号开始的黄金联赛苏黎世站，9月14号和16号的黄金联赛布鲁塞尔站与柏林站，28号的上·海站。

"Director Luo, is there any problem with the registration qualifications for the international competition?" he asked after being selected.

“During the Mid-Autumn Festival, as long as you have achieved a valid A-standard result in the country, you will be eligible to register for most competitions,” Luo Chaoyi said with a smile.

He then added: “If you don’t have enough points for the IAAF Grand Prix Final, you are not eligible to participate.

The points come from the IAAF's World Athletics Tour and Golden League, and the top seven in each event will participate in the finals, so those who participate in more competitions will have an advantage. "

He Zhongqiu said: "That doesn't matter, as long as I can participate in other competitions."

Luo Chaoyi nodded, and then asked expectantly: "Zhongqiu, can your 10-meter performance be stabilized within seconds now?"

He Zhongqiu said: "Basically, if you don't make mistakes and play normally, there will be no problem."

"Great!"

Luo Chaoyi laughed excitedly.

The two also talked about some things about track and field, such as the 200 meters, 400 meters, long jump and high jump.

"Director Luo, the events that are most likely to produce good results right now are the 100m and long jump. I'm not very proficient in the 200m and 400m curve techniques, and I rarely practice the high jump technique..."

He Zhongqiu decided that he could try the three short-distance events and the long jump with a running start, and would think about the high jump later.

After having lunch in Chinatown, he first sent everyone to the hotel. After they settled in the hotel, he went to his villa and prepared to have dinner at home in the evening.

The He Group's office is located in New York, on the 13th floor of the Mander Building in Manhattan.

The headquarters of the American branch of He's Martial Arts School, the American branch of He's Security Company, the New York branch of the American Mid-Autumn Film Company and the American Mid-Autumn Culture and Sports Agency are also together.

It was very close to He Zhongqiu's villa, only a ten-minute drive at a speed of 40 miles per hour. After leaving the hotel, the group went to the company first before returning to the villa.

He Zhongqiu prepared a baby room for the two children, filled the room with toys, and also prepared a playroom. After arranging the children, He Zhongqiu and Yang Xue began to discuss the issue of listing the martial arts school with Xia Song and Philip.

Philip said, "Boss, Mr. Yang, Mr. Xia, I have already formed a listing team. They have helped more than 30 companies go public. They are trustworthy and can complete all listing procedures within two months."

Yang Xue nodded, looked at Xia Song, and said, "Boss Xia, please tell San Jin about the current development of the martial arts school."

He Zhongqiu also nodded. His main focus was on basketball and track and field, and he didn't pay much attention to business matters.

In the past, he would send accountants to check the accounts of the two American companies regularly. Now, everything is managed by Yang Xue in the name of the group. If he hadn't specifically looked for information, he really wouldn't be very familiar with the situation of the martial arts school.

Xia Song nodded and said, “Mid-Autumn Festival, the total investment in the martial arts school is 3 million US dollars. Now there are 97 branches in total, and 3 branches are under preparation and will open within a week.

Now all branches are in the largest cities in the world. Except for 15 in China, the remaining 82 are all in developed Western countries.

These 97 branches all have three models and offer 1500 annual passes. The sales of annual passes are very hot and are basically sold out upon opening.

However, even in developed Western countries, the economy of each city is different, so the annual pass prices of the 97 branches are also different.

Including the 15 domestic ones, on average, an annual pass costs about $4000, a quarterly pass costs $1100, and a monthly pass costs about $400.”

"good."

He Zhongqiu nodded. An annual pass to several branches in New York costs $20,000, but New York is the largest city in the world.

Xia Song continued, "So far, in the past two years, annual card sales have reached 8.7 million US dollars, quarterly and monthly card sales have reached 5.8 million US dollars, and other general project sales have reached 2.5 million US dollars. The total operating income for the two years is 17 billion US dollars."

Yang Xue smiled and said, "The revenue-generating capacity is very good. On average, the annual revenue of a branch reaches 876 million US dollars."

He Zhongqiu asked happily: "What about the expenditure? How much profit has been made in the past two years?"

Xia Song said: "The operating expenses such as rent, labor, equipment, decoration, etc. are about 12 billion, and the investment in real estate is 5.7 million US dollars. The total expenditure for two years is 17.7 billion. We paid 1.9 million US dollars in taxes, and currently we have 4000 million US dollars in cash on the account."

He Zhongqiu said happily: "In other words, if we only count the real estate and cash, the total is 6.1 million. I invested 3 million US dollars and made 3.1 million in two years?"

Yang Xue nodded and said, "You can calculate it this way. It will take two years to make back the cost, and that's with the 5.7 million yuan real estate. If we rent all the venues, the short-term cost will not be so high, and the short-term profit will be higher."

Xia Song nodded and said, "But the cost will be higher in the later stage. If we buy a building and build a branch library ourselves, the cost will be lower in the later stage and will not be affected by the rising real estate prices."

Yang Xue said: "Although the development is good now, we can't be blindly optimistic, because if we open branches in the future, the return rate will not be as high."

Xia Song nodded and said: "These 97 branches and the three branches that will open soon are all in first-tier cities and are first-level branches.

After the successful listing, we will obtain development funds and open branches in secondary cities around the world. My plan is to open 1000 secondary branches.

We will continue to open third- and fourth-tier branches in third- and fourth-tier cities, and the number will increase, adding up to at least 1.”

Yang Xue smiled and said: "The revenue and profit of second-, third- and fourth-tier branches cannot be compared with those of first-tier branches. Even the profit of one hundred fourth-tier branches may not be as good as that of one first-tier branch.

So we can’t be blindly optimistic just because the current profits are high. In the future, as we have more branches and less profits, we need to work harder on operations and management.”

She mentioned the word blind optimism again, and Xia Song and Philip nodded repeatedly.

However, He Zhongqiu said: "Small cities can develop suitable projects and cannot copy the practices of big cities."

Yang Xue nodded and said happily: "But as long as we open 10,000 branches, the He's Martial Arts School will be spread all over the world and have unparalleled influence. It will play a very important role in promoting Chinese culture."

He Zhongqiu laughed and said, "Ten thousand branches will require at least one hundred thousand martial arts coaches, one hundred thousand fitness coaches, and two hundred thousand other staff. This is influence."

Xia Song brought the topic back to the topic and said, "The average annual revenue of a branch is more than 50 million US dollars. After deducting wages, rent, depreciation and other expenses, there is still a % net profit.

Take the United States as an example. The United States has federal taxes and state taxes, including corporate income tax, personal income tax, rental income tax, social security tax, property tax, self-employment tax, etc.

"How much is the tax?" He Zhongqiu was confused when he heard this.

Xia Song explained: "The martial arts school has a federal income tax rate of 35% and a state income tax rate of 6.5%, which adds up to about 52%.

But there are also many deductions, such as investment deductions. Adding them together, the U.S. branch has to pay about 35% tax on its profits.”

"Wellington, what is the asset valuation of the martial arts school by your listing operation team?" Yang Xue asked.

"Mr. Yang, fixed assets are $9 million, intangible assets are $10 billion, and their estimated total assets are $19 billion." Philip said excitedly.

He has received news that he will get 1% of the shares. If the assets are successfully listed at a valuation of US$19 billion, 1% of the shares will be US$1900 million.

But this is just asset valuation. The valuation before listing is to calculate future price-to-earnings ratio and profitability.

Given the profitability of the martial arts school, even if the second, third, and fourth-level branches are not as profitable as the first-level branch, the future price-to-earnings ratio should at least be 10 times.

In other words, with 19 billion in assets, the company's valuation would reach 10 billion if the price-earnings ratio was 190 times. And 190% of 1 billion is 1.9 million US dollars.

"As for intangible assets, considering the Mid-Autumn Festival brand, I think US$10 billion is still too little," said Xia Song.

Yang Xue said: "It doesn't matter if the intangible assets have a lower valuation. If the market recognizes it, the stock price will reflect the true value in the secondary market after listing."

Xia Song nodded quickly. As the general manager of the martial arts school, he naturally knew the school's current revenue and profitability.

"Sister Xue, how many shares should we issue when we go public?" He Zhongqiu asked.

Yang Xue said: "The company is registered in China. We calculated the RMB and invested a total of 24 billion, one yuan per share, a total of 24 billion original shares.

For the IPO, I plan to issue 8 million shares, which is one-third of the total share capital. After the successful listing, the total share capital will be 32 billion shares, with 8 million shares in circulation. This way, even if we expand our shares in the future, we can still maintain our controlling stake.

Next, we need to conduct a pre-IPO valuation. The current average P/E ratio of US stocks is 7.5 times. Given the profitability of the martial arts school, although it is not a high-tech company, we believe that our estimated P/E ratio will not be less than 10 times. "

When she said this, everyone present laughed.

If the listing is successful at a price-to-earnings ratio of 10, that is to say, the market value of He's Martial Arts School will reach 190 billion US dollars, and everyone here will become billionaires.

(End of this chapter)