Chapter 243 Leverage Operation and Land King Auction

Chapter 243 Leverage Operation and Land King Auction

Chapter 243 Leverage Operation and Land King Auction
After Zheng Yuhua left, Yang Wendong made a phone call and called Wang Fengzhi, who was in charge of the group's finances.

"Mr. Yang." Wang Fengzhi greeted after coming in.

"Sit down." Yang Wendong pointed to the sofa in front of him.

"Thank you." Wang Fengzhi said and sat down.

After several years of getting along, the senior executives of Changxing Group all understand their boss. He is very easy-going and has no airs. Not to mention the senior executives, even a cleaner like Yang Wendong never puts on airs.

It is absolutely not wrong to describe it as approachable.

Yang Wendong handed over a bottle of soda, and then asked: "Sister Wang, I would like to know the current situation of the group's several businesses.

I don’t need specific figures. I’ll see after the new year. I may need a lot of funds recently.”

When purchasing a large number of second-hand cargo ships, even if you can eventually find a bank loan, the proportion of your own advance payment will certainly not be low. This is a normal measure for the banking industry to control risks.

Wang Fengzhi asked, "Is it the land at Queen's Road 2 and the new ship in Japan? I have also prepared some funds for this."

"No, I want to buy more second-hand cargo ships." Yang Wendong denied.

As the financial chief of the group, Wang Fengzhi must be informed of any major moves in advance.

Wang Fengzhi thought for a moment and said, "Mr. Yang, several of the media businesses under the group are profitable, but not many. The total profit per year is only a few hundred thousand Hong Kong dollars. They can only bear their own profits and losses because they also need investment.

The real estate business has made a small profit, but there will also be important subsequent investments. In particular, Mr. Yang is also preparing to bid for Two Queen's Road, so he will definitely need to inject capital in the future.

Changxing Shipping has good profitability. It currently has a total of 8 cargo ships, and makes a profit of more than 400 million Hong Kong dollars a year. However, the time is not long yet, and there is not much money in the account. This is because these ships were purchased directly and in full by you individually, so there is no pressure to repay the loan. In addition, a dock will need to be built in the future, which also requires funds.

The most profitable one is Changxing Industrial. I estimate that the net profit this year will exceed HK$4500 million. However, because you have transferred a lot of funds to sister companies, plus the investment in Changxing Industrial Park, the funds on the account this year are estimated to be only HK$2000 million more. "

"What about the big debt?" Yang Wendong asked again.

Wang Fengzhi said: "The first is the debt of Changxing Real Estate for the acquisition of 7 buildings in Hong Kong Island and a large number of old buildings and land in Kwun Tong, with a total amount of more than HK$2500 million. However, these are all mortgaged, and the rent collected can cover the loan repayment.

The second is the investment in Changxing Industrial Park. We only invested HK$1000 million in this land and subsequent infrastructure, and the other nearly HK$3000 million was borrowed from HSBC and Standard Chartered.

There are also some other small debts, such as the land and warehouses that Changxing Industrial once bought in Tsim Sha Tsui, or the properties that Changxing Real Estate acquired in other places, and the dock in Zuijiu Bay. Adding these together, there is almost 2000 million in debt. "

"So we have a debt of 2 to million." Yang Wendong nodded and said, "With the subsequent land at Queen's Road, it will exceed million."

"Yes, we have to pay about 10 million for this piece of land, and we need to borrow the rest." Wang Fengzhi added: "Although our debts are high, they are all normal and healthy.

For every loan, we have equivalent collateral, which is either valuable or profitable in itself. Unless there is a serious economic crisis, there will be no risk.

Most importantly, we have the most profitable Changxing Industrial Factory, which makes tens of millions of yuan a year. Based on this figure, even if banks are cautious about factory mortgages, it is not a problem to lend a certain amount of money. "

"Hmm," Yang Wendong thought for a moment and asked, "I remember that there were about 3000 million Hong Kong dollars in Changxing Industrial's account last year. Is it about 5000 million now?"

"Yes, it's almost there." Wang Fengzhi replied: "There is enough cash in the account, and other businesses can use loans when possible. In addition, there are millions of profits every month. This is the safest way to operate.

This does not include some of the funds you have in overseas accounts.”

Yang Wendong smiled faintly and said, "I do have that money, but it's not a lot, and I have other uses for it."

In fact, if you run a factory in Hong Kong, you can keep most of the profits in overseas tax-avoidance accounts. However, Yang Wendong did not do so. Instead, he only kept a part of it overseas or in the United States to facilitate the acquisition of foreign company stocks, such as the previous Walmart investment.

The reason why most of the profits were kept in Hong Kong was mainly because it was only the early 60s and the electronics industry had not yet exploded. Although there were some overseas projects suitable for investment, Yang Wendong was not sure.
On the contrary, Hong Kong is the area he needs to focus on developing in the past decade. Keeping the profits in the factory in Hong Kong can make the factory's finances look very good, so that more funds can be leveraged to invest in real estate, shipping or other businesses to obtain maximum profits.

Wang Fengzhi added: "That's no problem. How many more cargo ships do you need to buy, Mr. Yang?"

"It could be 19 ships, or even more. It's like this." Yang Wendong told Wang Fengzhi some more specific details.

Since it was not confirmed before, there was naturally no need to inform the finance department. Now that the time has almost come, the finance department needs to make preparations as soon as possible.

After listening, Wang Fengzhi nodded and said, "I understand. Although the total price of so many second-hand cargo ships is not as high as the five new ships from Japan, it will indeed take up a lot of our funds."

In Hong Kong, well-connected shipping tycoons only need to pay 1% to 2% of the price of a new ship, and the rest is all loans or final payments, which they can then pay back slowly after the ship is built in the future.

However, this is extremely risky. Generally, the payment is more than 3%, but for a second-hand cargo ship, it is difficult.

Yang Wendong nodded and said, "So there are two ways now. One is to use Changxing Industrial's money directly to pay, but this may consume more than half of the funds in the account.

Another way is to use Changxing Industry as collateral for a loan. With the profits from our factory, a general bank would agree to this."

Although Changxing Industry also participated in mortgages before, the amounts were not high. This time the scale is large.

Wang Fengzhi thought for a while and said, "Then I suggest you mortgage it. Even if you borrow 3000 million, it's only half a year's profit of the factory. What's more, after the Changxing Industrial Park is completed, the profit will only be higher next year. Our group still needs to keep enough funds in the account to be safer."

"Well, that's fine." Yang Wendong nodded and said, "Cooperate with the financial department of Changxing Industrial to prepare all kinds of information. It will be needed when you apply for a loan again."

If you want to develop quickly, you have to take out loans. Otherwise, even if Changxing Industrial has extremely high profits, with 30 to 50 million Hong Kong dollars a year, you can only buy a piece of land in Central, or a few new ships, or a dozen or twenty old ships, or a large number of properties in Kwun Tong.
But now, if you make good use of loans, you can buy all these things within a year. Although the debt will exceed 100 million, these acquired properties or assets will either appreciate in value or continue to make profits.
Except for a few companies such as Apple, Lao Gan Ma, and Google, most other companies go through this kind of development process, especially those involving asset-heavy industries.

"Okay." Wang Fengzhi agreed.

After finalizing the subsequent development plan for Changxing Shipping, Zheng Yuhua went to Japan again, intending to reach an agreement with Mitsubishi Shipyard in a short period of time. At the same time, he also sent four teams under his command to negotiate with the sellers who intended to sell the ship.

Wang Fengzhi began to work with the finances of the two subsidiaries, Changxing Shipping and Changxing Industrial, to prepare the documents and wait for the bank team's review.

In the market, there was also news that Changxing Shipping was about to purchase a large number of second-hand cargo ships, which attracted the attention of many people.

a:
Central, Kent Building:
This is the headquarters of Global Shipping.

After listening to the report from his subordinate Wang Xiaowei, Bao Yugang was a little surprised: "Are you sure the news you heard is true? In addition to purchasing 5 new cargo ships, Changxing Shipping will also purchase about 20 second-hand cargo ships?"

"Yes, it should be true." Wang Xiaowei said affirmatively: "It was just a rumor at first, but Changxing Shipping suddenly released news that it would recruit a large number of captains, first mates, sailors, maintenance engineers, hull cleaning personnel, etc.

Although the exact number is unclear, it is far more than the number of people needed for five new ships, which confirms that the rumor seems to be true. "

Seeing his subordinates' confident expressions, Bao Yugang said, "If this is true, after his purchase is successful this time, Yang Wendong will probably be the new shipping king of Hong Kong."

"The tonnage is not enough, but judging from the number of ships, it is considered to be the king of ships." Wang Xiaowei added: "It's just strange why he bought so many old ships, we are all thinking about buying new ships;

Generally speaking, the reason for using old ships is that there is a lack of funds, so they can only use old ones. However, Yang Wendong should not be short of funds. He has a good relationship with HSBC and Standard Chartered, and there are banks in Japan that can provide joint loans. There is no need to buy old ships. "

"Maybe it's because of time?" Bao Yugang said uncertainly: "Even if he has enough money, if he wants to buy new ships, there are too many of them, so he needs to wait a very long time. But for old ships, as long as the price is agreed, the deal can be made immediately."

"It's possible, but why are you in such a hurry?" Wang Xiaowei said curiously, "With so many old ships, it will take a lot of energy to operate them. In the future, they will have to be scrapped in batches, which will have an impact on existing business."

"Perhaps it's because of the demand from Changxing Industrial Park?" Bao Yugang seemed to have thought of the problem: "Yang Wendong is engaged in shipping, and the main reason should be to export his own products. Now that such a large production base has been built, perhaps there is a demand in this regard?"

"That makes sense." Wang Xiaowei agreed, "I'm really envious. I already have so many businesses, so the risk of expanding quickly is very low."

"Yes, but there's no point in being envious." Bao Yugang shook his head and said, "We have to buy two new ships while the shipping business is booming now."

"Yeah," Wang Xiaowei nodded.

"More than 20 ships? All at once?" Dong Haoyun was silent for a moment after hearing his son's report.

After a long while, he said, "It's true that heroes emerge from youth."

Dong Jiancheng said: "Yes, once he really acquires 20 old cargo ships, plus 5 new ships, the scale of the ships will be enough to rank among the top five among Chinese shipping companies."

Dong Haoyun nodded and said, "Well, then you can also ask some international ship brokers to see if there are any suitable second-hand cargo ships. I also want to add ships."

"Dad, you want to compete with Yang Wendong to buy a boat?" Dong Jiancheng was puzzled and said, "It's not cost-effective to do so."

“I’m not going to compete with him for the ships he wants to buy.” Dong Haoyun shook his head and said, “I want to buy other ships, not the cheap cargo ships like the last time from the United States;
There are so many second-hand cargo ships for sale in the world, there are plenty of opportunities, how can I compete directly with Yang Wendong, I just want to expand the scale of Jinshan Shipping. "

"But our debt is also quite heavy," Dong Jiancheng reminded.

He knew his father's character well, cared a lot about his own reputation and the size of his company, and had always tried to become the number one Chinese shipping tycoon in Hong Kong.

Originally this goal was almost achieved, but now this newly rising Yang Wendong is actually investing so many resources in the shipping industry.

It may not be a threat now, but it is hard to say in the future.

Dong Haoyun smiled and said: "In fact, I am also very optimistic about the shipping market in the future, and you are right, our debt is too high;

Although Yang Wendong is young, I have to admit that he has a strong vision. Now even he has invested so heavily in shipping, which shows that he is optimistic about it, which is also a kind of confidence for me. "

"But." Dong Jiancheng was unable to refute for a moment. After thinking for a while, he said, "Yang Wendong's core business is not in shipping, but in industry. He also has real estate. Dad, I think we also need to diversify to reduce risks."

"The ship is the least risky." Dong Haoyun waved his hand and said, "The real estate cannot be moved. You can't take it away if something happens.
As for the factory, it actually doesn't make much money. Yang Wendong is the only one in Hong Kong. If you can invent products like sticky notes and suitcases, you can pick any two of my ships and I'll sell them to you to open a factory."

"Ugh" Dong Jiancheng was speechless.
Changxing Shipping's big move also caused quite a stir in Hong Kong's shipping industry. Yang Wendong didn't know that his move had also led to several Chinese shipping tycoons further leveraging their purchases of cargo ships.

It was the morning of November 11th, and Yang Wendong arrived at the Peninsula Hotel.

Because today, the auction of Two Queen's Road, Central, is held here.

(End of this chapter)