"You have also gotten the financial data of Curry, Gibson, and the full year of last year was $265 million, net profit was $15 million, and profit margin was 5.7%.

Sales this year are expected to grow by 4% to $275 million. However, due to the adverse impact of the market environment, Gibson has increased its marketing investment this year and is expected to remain unchanged for the whole year.

The greeting card market is already very mature in the United States, with a limited annual market growth rate, so RCA's initial offer to sell Gibson was only $100 million.

There is still a lot of room for concessions at this price. Our Merchant Lynch M&A consultant told me that the final transaction price should be between $75 million and $85 million.

Even based on the highest transaction price, the P/E ratio of this transaction is only 5.67 times. The average P/E ratio of the US stock market is 7.2 times, and the value difference in the middle is about US$23 million, which is enough to cover all the costs required for our acquisition and future listing.

Of course, I don't think the stock market's 7.2-fold price-to-earnings ratio is normal. Although the US economy is experiencing a recession, the destructiveness of this recession is not that severe.

The decline in the stock market is mainly due to the soaring interest rates, and the Federal Reserve cannot maintain high interest rates for a long time. As interest rates fall to normal levels in the next one or two years, I believe that the average P/E ratio of US stocks should be able to recover to about 10 times.

If the price-to-earnings ratio can reach 10 times, even if Gibson's net profit no longer grows, its market value should be $150 million.

So what we are buying this time is actually a judgment on the future economic trend of the United States. I personally believe that as President Reagan reduces government spending and implements large-scale tax cuts, the U.S. economy will recover soon."

After confirming that Curry Perkins is really drooling in the junk bond business, Zhou Yang finally told the other party that his next acquisition target was Gibson Greeting Cards.

After Perkins got the answer, he immediately investigated the situation of Gibson. After all, if he really joined Zhou Yang's action, it would be a big adventure that would block his career.

If the acquisition plan fails or is not satisfactory, there will be problems in the repayment of junk bonds. Investors will definitely vent all their anger about losses on the bond seller, as their bond.

If this happens, Perkins' reputation on Wall Street will be immediately hit hard. After all, he is not like Milken, who has long proved his strength in the junk debt field. A mere one or two failed cases will not affect investors' confidence in Milken and Dechuang Securities.

"Charlie, this is not enough! Junk debt is still a very risky product for Merrill Lynch customers, and I need more reasons to convince them." Perkins said in a deep voice.

"We can offer an annual interest rate of 18% for junk bonds, which is an extremely high rate of return that medium and long-term Treasury bonds and ordinary bonds simply cannot achieve.

You should tell those fund managers that adding some junk bond products to their investment portfolio can effectively improve the overall expected return rate. Isn’t this a win-win option?” Zhou Yang said with a smile.

Merrill Lynch’s fixed income department’s clients are mainly mutual funds, pension funds and insurance funds, and most investment managers are relatively conservative.

However, the US stock market has not performed well this year, and many funds have even negative returns. Poor book performance will naturally bring great operating pressure to fund managers.

"What I plan to help you with underwriting is $50 million instead of $50,000. If you want me to block my career, the analysis just now is not enough." Perkins shook his head, but his eyes were staring at Zhou Yang.

"Okay, the next words were originally intended to convince Gibson's management, and now I'll disclose them to you in advance.

Curry, let me ask you a question first, why did RCA choose to acquire a CIT company?" Zhou Yang asked back with a smile.

"RCA's main business has not performed well under the competition of Japanese companies, so mergers and acquisitions are the best way to achieve financial report expansion." Perkins' professionalism was excellent and he answered without thinking.

"Yes, RCA's TV business has long been on the verge of collapse. If it weren't for the high-quality asset of NBC TV, it would have been difficult for it to support its current stock price.

Not only electronic products such as TVs, but also the three major American automobile giants are also in a dilemma of deteriorating conditions under the impact of Japanese cheap cars.

The reason why Japanese products can be cheap enough is that in addition to the higher productivity of their employees than American workers, Japan's overall salary level is also lower than that of the United States.

However, the American greeting card market has not been attacked by Japanese counterparts. Asian countries are not used to sending greeting cards on various occasions, just like European and American countries.

There is no large enterprise like Gibson, which specializes in producing greeting cards, in Japan." After Zhou Yang said that, he showed an expression that you understand.

The number of occasions for Americans to send greeting cards is unimaginable to Chinese people. In addition to traditional festivals such as Christmas, New Year's Day, Valentine's Day, Father's Day, Mother's Day, birthday, wedding anniversary, etc., greeting cards are used even for the birth of babies, the death of the elderly, the graduation of children, and the promotion of colleagues.

"You mean the greeting card market will not face competition from Japanese companies?" Perkins immediately refined the key points.

His eyes lit up, which was an excellent reason to convince investors. In the 1980s, the United States was in a "Japanese phobia", and almost all industries that compete directly with Japan were facing the dilemma of being defeated by the other party.

So much so that the Americans simply turned the table up and directly used government negotiations to replace corporate competition, raising the "wolf-tooth stick" of the trade war.

So finding an industry that will not face Japanese competition is still very attractive to American investors.

"This is only one, and there is another second. In the free market, the shift of manufacturing from a place with high costs to a place with low costs is a development trend that no one can change.

Curry, you should know that I work in Merrill Lynch, so I naturally have a deeper understanding of the Asian market than most Americans.

Many low-end light industries in Japan actually began to transfer secondary to T Bay, Hong Kong and other regions more than ten years ago.

And as the mysterious red China opens its doors and implements new economic policies, a new round of industrial transfer will come again. Did you know that the monthly salary of an ordinary worker in China is only US$30!

The production and manufacturing of greeting cards is not a high-threshold industry. If we move Gibson's factory to China, how much cost do you think you can reduce?" Zhou Yang pointed at himself and said.

"Yes, you are a Chinese and still working in Hong Kong! You said that Chinese workers only need $1 a day to earn. Is this true?

Oh my God, how should they survive? We must save them and can double their salary!" Perkins immediately whispered.

"You are really a kind gentleman!" Zhou Yang said with a smile, his calm tone did not make the other party notice the ridicule in his heart.

"So we can sell all Gibson's production lines in advance, which can solve a large part of the acquisition funds." Perkins immediately put forward a new suggestion following Zhou Yang's thinking.

"Curry, our plan to build a new factory in China cannot be achieved overnight. So in the short term, we must maintain production capacity in the United States." Zhou Yang disagreed with Perkins' excitement.

"Of course I understand, so this will be a sales and renting agreement. We will first sell Gibson's production line in the United States to other investors and promise to rent the entire capacity of the original production line.

Many listed companies will play this kind of game in order to improve their financial statements in the short term. However, the takeovers cannot guess that we will invest in new factories in the mysterious and distant China.

You just need to find a reasonable excuse to shorten the term of the first lease and then verbally promise a second longer lease." Perkins said with a smile.

Selling fixed assets can allow listed companies to add a new profit to their financial statements. If Chinese listed companies perform poorly, selling a few houses can increase their profit levels.

Zhou Yang did not expect that Americans would have fun and even the company's core production line could be directly taken out.

Perkins is worthy of being an elite on Wall Street. He thought of a complete set of ways to eat people up, so Zhou Yang's heart is still not dark enough.

"I have limited connections in the United States. I need your help when selling production lines." Zhou Yang immediately said with a snake and a stick.

"No problem, I will help you release the news. Then someone will naturally contact you!" Perkins immediately nodded and agreed.

"So you really made up your mind to join our plan?" Zhou Yang asked with a smile.

"Of course, why not! I'm more optimistic than you. I think the price-to-earnings ratio of the US stock market will rise to at least 15 times, which is the normal level!" Perkins finally showed a cunning smile.

"50 million US dollars is not a small amount. The success or failure of the issuance of junk bonds is directly related to whether our entire plan can continue." Zhou Yang confirmed to the other party again.

"We are Merrill Lynch. You have to believe in the company's influence in the United States. Milken and Dechuang Securities are just taking the lead. On the contrary, if you want to complete a merger and acquisition quickly, it is not just a financial problem." Perkins said confidently.

"I am communicating with Komansky and hope to gain understanding and support from senior management of the company through him. I hope that you can also exert some influence in this matter and express your support to me.

In addition to Merrill Lynch, President Kennedy’s daughter Ms. Caroline will also join our team. She can mobilize some of the resources of the Kennedy family and help us solve some political problems.

In addition, I am convinced that former Finance Minister Mr. William Simon. If he can join, our plan will be much smoother." Zhou Yang said.

He originally regarded William Simon as the biggest opponent of the operation, but after investigation, he found out that the other party had no clues of contact with RCA.

If he really has decided to acquire Gibson, he will definitely start to form his own acquisition team and actively coordinate the acquisition funds.

But William Simon did not have these actions, so Zhou Yang suddenly changed his position from a competitor to a partner that he could win.

Zhou Yang had actually met William Simon once, and the two had an in-depth discussion on the leveraged acquisition during the chat.

But it was impossible for Zhou Yang to make a big boss who had been the US Treasury Secretary to immediately bow down to him, a foreign young man who was in his twenties.

Only when Zhou Yang shows his strong strength to William Simon can he truly win the respect and recognition of the other party.

In this regard, he chose to start from the perspective of raising funds and directly invest 100 million US dollars in front of the other side. Then he will see if he will be moved.

In order to ensure that the acquisition plan is foolproof, Zhou Yang’s fundraising goal this time is not to have a historical acquisition price of US$80 million, but to prepare 100 million US dollars first.

But even if Curry Perkins can sell $50 million junk bonds, Zhou Yang still has a $50 million gap.

Normally, this money can be solved by looking for a bank loan, but the problem is that Zhou Yang has no connections in the banking industry in the United States.

Due to the limitations of relevant policies, the Daim Loan Association has not yet begun to relax, and commercial loans other than housing mortgage loans cannot exceed 5% of the total assets, so it is currently unable to provide too much credit support for Zhou Yang's next actions.

Fortunately, Zhou Yang had already thought of a solution. Although his reputation on Wall Street was not obvious, Zhou Yang's reputation in Hong Kong was at its peak. His previous series of tricks were only effective for ordinary people with information blocked.

In the Hong Kong financial industry, especially those bigwigs who are wary of Merrill Lynch's entry into the Asia-Pacific market, it is clear who is the leader who launched a fatal blow to Chen Songqing and Jianing Group.

Zhou Yang has been leaving Hong Kong for almost a month. Previously, both the Hong Kong Securities Regulatory Commission and ICAC have begun to intervene to investigate the illegal issues of Jianing Group suspected of false transactions and commercial bribery.

As the main person involved in the case, Chen Songqing and Zhong Zhengwen were also arrested by the Hong Kong police. It is said that the two spent a sky-high bail of 10 million and 8 million Hong Kong dollars respectively before they were released on bail.

As a result, Zhong Zhengwen fled overseas on the third day after he was released from prison, causing Chen Songqing to be detained by the police again. This time, the judge simply rejected the defendant's lawyer's second bail application.

Affected by a series of explosive news, although Jianing Real Estate's stock has not been suspended, its stock price has fallen below HK$0.1.

As the Jianing stocks mortgaged in the hands of banks almost turned into waste paper, major banks have applied to the Hong Kong government for bankruptcy liquidation of Jianing Group.

The Hong Kong government specially selected HSBC Bank, one of the creditors, to come forward to carry out bankruptcy and liquidation of Jianing Group.

Merrill Lynch’s previous short-selling of the Ganing Group has also closed all positions. The profits Zhou Yang’s team alone have been earned as high as US$45 million.

This has also pushed up the total floating profit of the asset management plan, which has exceeded US$60 million.
Chapter completed!