Chapter 35: Investment and Acquisition Offers

The meeting at Xinyue Cosmetics was still underway. The Director of Marketing continued, "Right now, the internet is raving about this company’s facial masks. Saying demand outstrips supply isn’t an exaggeration at all."

"Nearly every consumer who’s tried them reports visible whitening and hydration effects."

"According to our finished product tests, the mask’s main ingredients are broadly similar to other masks on the market."

"However, they’ve added numerous herbal components—some we’ve identified, others remain unknown for now."

"So, it seems their formula achieves whitening and hydration through the properties of traditional herbs, but as for the exact mechanism and pharmacology, we’re still in the dark."

"Their current sales volume is limited only by their production line capacity and the supply of herbal materials."

"If they ramp up production and solve the raw material bottleneck, their sales could grow exponentially."

"None of the competing products on the market can match their effects—not even many cosmetics or pharmaceuticals. They simply have no rivals."

"Reliable sources indicate that Powdery White & Black Cosmetics is expanding its production lines and has been stockpiling herbs for some time, now stepping up its purchases even more."

"It’s foreseeable that within two weeks at most, their sales will surge dramatically."

With these words, the Director of Marketing returned to his seat, sipping water as the shareholders and management digested what he’d just relayed.

...

The shareholders present eyed their folders, each reacting differently—some grave, others itching to act. After a while, one ventured, "Is there any chance we can analyze all the ingredients in their masks?"

The implication was clear: reverse-engineer the formula, reproduce it, and seize the market.

A manager replied, "We haven’t had the samples for long. So far, the lab has identified roughly seven or eight herbal components."

"There are still over a dozen we can’t pinpoint. Lab reports mention some substances they’re not even sure are herbs—they might be something else entirely."

The shareholder who asked the question looked disgruntled, frowning in thought.

A younger shareholder interjected, "Have we ever reached out to this company? Is there any chance of acquisition or buying shares?"

A few people immediately shot him looks of disbelief—surely, a company with such a near-monopoly product would never agree to an acquisition or let anyone invest.

Nevertheless, a vice president, sparing the young man’s dignity, answered, "We’ve made preliminary phone contact. The general manager at Nebula Beyond said he only handles daily operations; for these matters, we’d need to speak to his boss, whom we haven’t been able to reach."

The young shareholder was puzzled. "Then just ask the general manager for his boss!"

Someone couldn’t hold back: "If he hasn’t told us, that says it all."

Chastened, the young shareholder fell silent, clearly unwilling.

...

After some more discussion, the major shareholder concluded, "Here’s what we’ll do: increase investment in our labs, try to analyze as many components as possible, and attempt to produce a comparable product."

"Also, send someone to approach the company again—and see if there’s any chance to buy in."

"We have an extensive sales network; we complement each other well. Try to secure as big a share as possible."

Xinyue was considered a major domestic cosmetics company, targeting the lower to mid-range market and holding a significant market share. If they could acquire most of Powdery White & Black’s shares, they were confident they could become a domestic leader, even rivaling international giants.

Right now, their plan was to seize this company before other large domestic or international competitors caught on—reaping the rewards without much thought for whether the other party was willing.

This attitude was shaped by their previous experience.

...

By rights, the rival firm’s product had clear advantages, but their scale was small, lacking resources and distribution channels. Xinyue, on the other hand, commanded a vast offline network and years of connections.

The two sides were indeed complementary—there was a basis for cooperation. For small domestic cosmetics firms, survival was notoriously difficult; few escaped collapse or acquisition. So Xinyue’s board felt it only logical to partner, let the smaller company take investment, and thus rapidly expand.

But this notion was doomed from the start. Did they really think Lu Yu, who had registered a sole proprietorship, would let others buy into his company? Would he really let anyone else share in what should be his alone? Was he out of his mind?

Eating alone—wasn’t that far more satisfying?

...

Besides this major domestic player, two international cosmetics giants’ China branches had also taken notice of Lu Yu’s company. Each had compiled detailed analysis reports and sent them back to headquarters, which replied promptly: acquire them at any cost.

Many domestic mid-sized cosmetics firms had caught on as well. Competing directly in the market, they were even more attuned to its changes.

And it wasn’t just companies—investment firms, with their even sharper instincts, had gathered even more comprehensive information than the big domestic cosmetics firm. Their files covered funds usage, equipment procurement, even detailed profiles on Lu Yu himself.

He was a top graduate from Shudu University, an academic high-achiever. Though he’d skipped classes often, his grades were always strong, and he was highly creative. After college, he’d started his own company, though it had ultimately failed.

Some VCs even discovered that Nebula Beyond’s first deal had been struck with Ali Corporation, involving a genuine transfer of 200 million to their accounts, though the details remained unclear.

...

Many investment firms found themselves with throbbing headaches as they pored over these documents.

Lu Yu’s company lacked neither capital nor market. Consumers were united in their enthusiasm. If the company stayed the course, strong growth was inevitable.

There were no bank loans, raw materials were being steadily stockpiled, and customers raved about the products, which were perpetually sold out.

There was simply no way in.

How could they pitch an investment? Give them money to sit idle in the bank? The other side wasn’t stupid.

As for resorting to dirty tricks—spreading rumors or slander, as in some novels—come on, it’s 7102, and the internet crowd isn’t so gullible.

Besides, they were investors, not saboteurs. Even if they managed to invest after smearing the brand, how would they make money?

That kind of move was for rival cosmetics companies, not for them.

On one hand, their capital and resources weren’t needed. On the other, the investment opportunity was mouthwateringly immense. This left the investment firms deeply frustrated.

They could see the feast right before them, yet couldn’t take a bite. The itch was unbearable!

They spent days in brainstorming sessions, even forming dedicated teams to devise ways to invest in this company.

Many investors traveled to Shudu, hoping to meet Nebula Beyond’s executives and try anything to convince them to accept funding.

...

The result was that Liu Shichang, while checking company emails, discovered two acquisition offers and over a dozen investment proposals.

He didn’t even need to think—Lu Yu would never accept any acquisition or investment. Given the product’s quality, it was a veritable gold mine!

Still, he called Lu Yu to brief him on the situation.

Lu Yu didn’t hesitate for a second, instructing him to reject them all, and not to bother him with such matters again.

Liu Shichang just shrugged—he’d expected as much. He then drafted polite, tactful replies to all the emails.

In short: thank you for your interest and appreciation, but for now, we have no need for investment and no intention to sell.

Naturally, the VCs weren’t deterred by a single email. They soon tracked down Nebula Beyond’s office location.

Incidentally, the company’s registered address had already been updated to an office near Tianfu Square.

The two international cosmetics giants, especially, had received orders to acquire at any price. Their China division staff had no intention of giving up easily, so they too made their way to the office.

...

That Monday, employees returned to work after the weekend; Shi Zixuan and Qin Xiaomian among them.

Liu Shichang and Zhou Jing, the head of investment, met downstairs and went up together.

They’d barely settled in when representatives from various investment firms and international cosmetics companies began to arrive.

The receptionist, puzzled, notified Liu Shichang’s assistant, who in turn informed Liu Shichang.

He felt a headache coming on and called Zhou Jing to join him. First, he relayed Lu Yu’s stance, then the two went to meet their uninvited guests.

Once everyone was seated in the reception room and served hot water, Liu Shichang faced them, hesitated briefly, then decided to be direct.

"Gentlemen, I understand your intentions."

"However, President Lu has already made it clear—just as we replied in our emails—Nebula Beyond has no plans for financing at this time."

Turning to the international representatives, he added, "Nor are we considering selling the company, so you needn’t even ask. Convincing me would be pointless—my boss won’t agree."

"So if you want to persuade someone, talk to my boss—though it likely won’t do any good."

"In my opinion, there’s no way he’ll sell the company or any shares. Otherwise, why set up a sole proprietorship in the first place?"

...