Chapter 319: Win-win situation with HSBC
Chapter 319: Win-win situation with HSBC
On February 2, in a luxurious suite at the Peninsula Hotel, an old man and a young man, one Yang and one Hua, sat on the balcony, enjoying the comfortable sea breeze.
"The scenery here is really nice." Sanders looked at the Victoria Harbor not far away and said, "Looking from here many years ago, there was nothing on the Kowloon Peninsula except the pier and the surrounding area;
But now, all kinds of buildings have come out, and it has become an important economic center of Hong Kong."
Yang Wendong said with a smile: "Hong Kong Island is limited in area and its carrying capacity is always limited. If the economy needs to develop and people want to live more comfortably, they will inevitably develop towards the Kowloon Peninsula.
Even in the future, there will be towns in the New Territories. This is an inevitable development, just like the early European and American countries.”
"Yes, it seems that HSBC has to focus on developing business in the Kowloon Peninsula." Sanders nodded and said, "Hang Seng Bank is one step ahead of us. Even if HSBC goes there, it will not be able to compete with them."
Yang Wendong said: "Chinese banks did not develop smoothly in Hong Kong Island in the early days, so they could only go to Kowloon Peninsula. Now they have also developed along with Kowloon Peninsula."
Today, Hang Seng can be said to be a new upstart in Hong Kong's banking industry and even financial conglomerate.
The rise of Hang Seng Bank in the 60s posed a huge threat to HSBC. Even though its scale was still far smaller, its development trend was too fast. Its biggest feature was that it had a strong foundation in many towns in Kowloon.
Due to the limitations of information transmission, many local people only recognize Hang Seng Bank, which established a branch locally in the early days, and do not recognize HSBC, the leader of Hong Kong's banking industry, just like many people in the mainland only recognized local credit cooperatives in the early days.
This may also be the most important reason why HSBC is planning to defraud Hang Seng in the future.
"Yes, even a large number of factories have moved to Kowloon." Sanders added, "Especially Mr. Yang's factory, which has driven hundreds of millions of output value there."
Yang Wendong smiled and said, "I started my business in Kowloon, so the factory is naturally located there; but now Hong Kong's electronics industry is still mainly in Hong Kong Island, and a large electrical appliance factory that I will soon invest in will also be located in Hong Kong Island."
Changxing Industrial has already taken root in the Kowloon Peninsula for early reasons, so it will stay there; and Honor Electronics plans to place its main production capacity in Hong Kong Island in the future.
This is also because the electronics industry has higher requirements for talent and is not so sensitive to wages, so it is more appropriate to place it in Hong Kong Island. As for the high land prices, this no longer existed in 66.
"Haha, that's fine." Sanders said with a smile, "Then congratulations to Mr. Yang for making great progress in the electrical appliance industry. What appliance is it? Is it the rice cooker your company launched before? Or is it a kettle?"
He had also heard of Yang Wendong's electronics company, but the British were not very interested in these products as they were not what they needed.
Yang Wendong shook his head and said, "No, it's televisions, a TV factory with an annual production capacity of more than 50 units."
"Television?" Sanders' eyes lit up. "Mr. Yang, this is really a big deal. Such a television project can boost the economy tremendously."
Even if the factory price of the TV is 100 yuan per unit, the total value is 5000 million yuan.
Yang Wendong said with a smile: "Enterprises need to develop. Televisions are now an appliance that everyone in any country wants to add. As Hong Kong is now a famous factory base in Asia, it is natural for us to get involved."
In the previous Internet era, people’s happiness threshold was raised too high, so they basically had no interest in television.
But in this era, how many people dream of having a radio or a TV. This was also the case in mainland China in the 80s. How many people spent half the money for a house to buy imported color TVs.
"That's right." Sanders nodded and said, "Mr. Yang asked me out because he wanted to cooperate with HSBC on this project."
"Yes." Yang Wendong nodded and said, "This project requires a lot of US dollars to purchase equipment, and we also need to choose a suitable location in Hong Kong Island and buy a large piece of land to build a factory, so we naturally need HSBC's help.
After the factory is built, we will sell or export televisions in Hong Kong, and then gradually repay the debt.”
Although I can come up with this amount of money myself, it is definitely better to use the bank's money. If I save a little money, it will be more convenient to buy a boat or land after 66 years.
"How much money will it take?" Sanders asked.
Yang Wendong replied: “It depends on the location and size of the factory. The equipment production line alone will cost about 300-400 million US dollars;
This kind of production line cannot be placed in a high-rise building. It must be built into a one-story factory building with an estimated area of at least 30 square feet. According to the price of industrial land in North Point, it is estimated to cost HK$1000 million.
The deal with RCA has not been finalized yet, but the approximate price has been announced. It includes not only the equipment itself, but also many patents. With these patents, we can sell our televisions freely to various countries in the future. If we are willing to invest in research and development, we can also conduct further research based on these patents.
"Such a large area? It's not easy to find it on Hong Kong Island." Sanders asked in surprise.
Yang Wendong smiled and said, “Yes, but if we fill the sea or blow up the mountain, we can get it.”
It is quite normal for some factories or real estate projects in Hong Kong to reclaim land and dig mountains to obtain flat land. For example, the Tin Ka Ping Chemical Factory in 1958 reclaimed land to obtain an area of 30 square feet. The same will be true for the future Kwai Chung Container Terminal. As for real estate projects, there are even more cases of reclaiming land.
“That’s not cheap,” Sanders said.
"But the returns are higher." Yang Wendong said: "As long as the TV factory can produce smoothly, it is not a problem to export tens of millions or even hundreds of millions a year. And this may just be the beginning."
Not to mention the industrial project itself, even if such a large piece of land is acquired now, it will be worth billions or even tens of billions in the future.
Because many times, without a reasonable reason, the Hong Kong government will not allow you to reclaim land, even if it is British capital. Hong Kong real estate is the lifeline of the Hong Kong British government's finances and is completely controlled by the Hong Kong government.
Sanders thought about it and finally said: "I need a complete planning project, including your production research, terminal channel information, etc. I don't need your company's core secrets, but I must be able to prove that this project can be profitable." "No problem, I will send someone to deliver it to your bank in a while." Yang Wendong nodded and said.
This is the trouble with commercial loans. For a large project, banks need to do a lot of investigations. It is not as convenient as real estate companies that can decide how much to lend by simply looking at the total value.
"Okay." Sanders nodded. "Once we have all the information, we can discuss the loan amount and interest."
For real estate or shipping projects, Sanders can make a decision quickly based on market references, but a new factory like this involves tens of millions of dollars, so it requires very careful investigation.
"Okay." Yang Wendong didn't expect to be able to make a decision right now, and then he said, "Mr. Sanders, the second thing is about the Hong Kong Radio Station."
Sanders laughed and said, "You want to bid for this radio station?"
Many decisions of the Hong Kong government are kept absolutely confidential to outsiders, but for HSBC, Hong Kong's quasi-central bank, they are not a secret.
"Yes." Yang Wendong nodded and admitted, "My media company needs a TV station. It just so happens that I can produce TV sets myself, which can also lower the price of TV sets in Hong Kong."
"Haha, I've seen Mr. Yang's investments over the years, and I know you're good at integrating the entire industry chain. The TV factory + TV station is indeed a good combination." Sanders smiled and said, "It's just a TV station. It won't cost much. Do you still need to discuss this amount of money with me?"
HSBC will naturally do business if there is one. Even with HSBC's size, it will not refuse deposits or loans of tens of thousands of dollars.
But small business is naturally not worth Yang Wendong and Sanders discussing in person here.
"There's no need to bother Mr. Sanders with the funding. My people will go to HSBC's credit department." Yang Wendong replied, "I want HSBC to invest and compete with me for this TV station."
"I see." Sanders was a smart man and naturally understood Yang Wendong's underlying request.
It’s not that they don’t have enough money and want to attract shareholders, but they want to bring HSBC in to increase the probability of successful bidding in the future.
Yang Wendong said with a smile: "There is only one Rediffusion Television in Hong Kong now, and the total number of customers is only 10,000 households. Once there is a wireless television station, plus the TV sets are cheap enough, it will not be a problem for the number of free TV users to exceed 100,000.
Not to mention that Hong Kong's economy is still growing and its population is increasing. I believe that in the future, Hong Kong will be like the UK, where every household will have a television, and even several."
"I agree with this point. Hong Kong's economy is indeed developing rapidly." Sanders nodded and said, "From the perspective of economic returns alone, this project will not lose money. I wonder how many shares HSBC can get?"
Yang Wendong knew it was about right when he heard it, so he said, "20%, how about that?"
Sanders asked: "Mr. Yang needs to win over more than just HSBC, right?"
"Yes, there are other companies, but I'm not sure which people I can attract." Yang Wendong replied: "I can give up 30% to 40% of the shares. HSBC can be said to have almost half of it."
Sanders smiled and said, "Okay, I'll agree to it first. I'll discuss this with the directors at the next HSBC internal meeting. It shouldn't be a big problem."
"Okay, then let's work together to build this TV station, which will definitely give all investors a stable and high return." Yang Wendong said with a smile.
The boss of HSBC has great power. Basically, he has made the decision and all that is left is to go through the procedures. The other directors are like mascots.
For example, in his previous life, when Stephen Simpson sold Hutchison Whampoa shares to Li Jiacheng at a low price, it was Stephen Simpson's own decision, and it was useless for other directors such as Jardine Matheson and Swire to object.
Sanders also said: "I also hope that Mr. Yang and I can achieve a win-win situation."
In Hong Kong today, even big companies like Jardine Matheson and Swire are aware that the rise of Yang Wendong, the new Chinese upstart, is unstoppable.
However, Changxing Group's main industries are still industry, real estate and shipping. These three industries do not conflict much with traditional forces. Even in the real estate industry, there is no conflict at present because the entire market is large enough.
Of course, with future development, competition among large conglomerates will become inevitable. This is unavoidable.
HSBC is the most special one. It is a bank and is restricted by the Hong Kong government's requirements and cannot participate in other industries. Therefore, it has no natural conflict of interest with the new Chinese elites. On the contrary, it will benefit from cooperating with them.
"I hope so too." Yang Wendong smiled and then said, "Mr. Sanders, the Hong Kong government will bid for the Wellington Road land next week. In this regard, we still need to cooperate at that time."
His cooperation with HSBC is also a win-win situation, especially when foreign-related projects require foreign exchange, he can only turn to HSBC;
It was Sanders who first informed me of the land king in Central, so naturally I had to return the favor.
"No problem." Sanders nodded.
……
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(End of this chapter)