Chapter 370 Real Estate Business Allocation
Chapter 370 Real Estate Business Allocation
"You mean, cooperating with Changxing Real Estate in the real estate field?" Li Jiacheng asked.
Since he wanted to enter the real estate industry, he naturally told Zhuang Yueming about it. They both were optimistic about real estate, which made them make the decision.
Zhuang Yueming nodded and said, "Yes, since we have decided to do real estate in the future, there is no need to consider too much about Cheung Kong Industries' factory. As long as we can maintain the current scale of the enterprise, it will be fine. Even if we can't maintain it, we just need to avoid a one-time large-scale layoff that will affect the company's reputation."
"Yeah," Li Jiacheng agreed, saying, "But Cheung Kong Industries is also our starting point. Unless it is absolutely necessary, I still want to continue to operate it normally."
"I understand. It is said that Yang Wendong's company is also producing mouse traps on a large scale. With his current wealth, he probably has the same idea as you." Zhuang Yueming smiled and said, "But the most important thing for us is to seize future opportunities. As long as the new business can make money, it will be easy to run an unprofitable factory."
"Yes, but how can we cooperate in real estate?" Li Jiacheng asked, "Changxing Real Estate Company is basically independent in Hong Kong, unlike other real estate companies. Generally, we rarely cooperate with other real estate companies."
Since he wanted to enter the real estate industry, Li Jiacheng naturally did in-depth research on the real estate market. Most real estate companies like to cooperate with other peers in order to reduce risks and make it easier to obtain loans from banks.
However, Changxing Real Estate rarely participates in joint venture developments, probably because it is backed by Changxing Group and has huge funds and bank credit lines of its own.
Zhuang Yueming replied: "It is indeed not easy, but I have also studied the investment situation of Changxing Real Estate and found that they never invest in ordinary residential properties."
"Ordinary residential property?" Li Jiacheng thought for a moment and said, "Changxing Real Estate has high-end residential business. Maybe they don't care about this."
Zhuang Yueming explained: "It is possible. Although high-end residential properties have high profits, the majority of residential properties purchased in Hong Kong today are still purchased by ordinary people. The scale of this market is far greater than that of luxury homes. There is no reason for Changxing Real Estate not to participate.
I think it may be because ordinary residential disputes are more frequent and conflicts are more likely to arise, so they don’t do it.”
"Or maybe it's because Changxing Real Estate has limited funds." Li Jiacheng analyzed: "Changxing Group is indeed large in scale, but it is impossible to devote all of it to real estate business, so the real estate business cannot participate in everything."
Zhuang Yueming smiled and said, "Actually, no matter what the reason is, if they don't participate, that's our opportunity. When we enter the real estate market, we can only do ordinary residential or industrial office buildings at the beginning. We can't do high-end business."
"That makes sense." Li Jiacheng nodded and said, "Then I will do some market research. If it is feasible, we can build ordinary residential buildings and bring in Changxing Real Estate, and then give them dividends."
Zhuang Yueming added: "Yes, this way, it will be much easier for us to get a bank loan."
Banks will certainly feel more assured about projects developed in cooperation with large financial groups, because large financial groups generally will not default easily, and will repay the money even if the project loses money.
"Yes." Li Jiacheng added: "It's just that Yang Wendong is not optimistic about the Hong Kong real estate market now. I think it will be difficult to cooperate like this in the short term."
Zhuang Yueming smiled and said, "This shouldn't have any impact. You just need to submit a plan. Even if the real estate market falls, it will return to normal later."
"Yeah." Li Jiacheng nodded.
Looking at the real estate market in Hong Kong in the past, except for the war factor, the rest of the time was a bull market for six to seven years and a bear market for one to two years. In the long run, it has been rising.
A few days later, Zheng Zhijie knocked on Yang Wendong's office door.
"Come in." Yang Wendong was reading an overseas English newspaper. When he saw the person coming, he put it down.
Zheng Zhijie came forward and said, "Mr. Yang, this is a cooperation proposal that Li Jiacheng gave me. Please take a look."
"Oh, let me see." Yang Wendong took it and read it carefully. After a while, he said with a smile: "His suggestion is similar to Sun Hung Kai's."
Zheng Zhijie nodded and said, "Yes, they have also discovered that Changxing Real Estate generally does not cooperate with external funds, and the area that is not involved is ordinary residential."
"They are responsible for developing ordinary residential houses, and then we invest a part of it without having to participate in management. We will directly get dividends after success. It sounds really attractive." Yang Wendong also said with a smile.
He might not feel it was safe if he were to work with other people on such a project, but the historical achievements of Sun Hung Kai and Cheung Kong Holdings are the best proof of their strength.
In fact, ordinary residential housing is indeed a very large market. In the past, many real estate giants in the mainland relied on this to grow to a certain scale. However, it is very difficult to do well in this market, because just like a supermarket, it seems easy and anyone can do it, but to be at the forefront, it requires unparalleled absolute strength.
Moreover, this type of ordinary residence is most likely to cause social conflicts and is also complicated.
This is why he did not participate in ordinary residential projects in the early days. Now this cooperation is not bad. By utilizing their capabilities and investing his own funds, he can ensure a stable return.
Zheng Zhijie smiled and said, "Yes, and we are also their shareholders. Cooperating with them will not only bring returns in terms of projects, but also returns in terms of company investment."
"That's fine." Yang Wendong nodded and said, "Then discuss the investment funds with them. As for the cooperation on this residential property or other projects, you can verbally promise them that you will strengthen cooperation in the future, but don't write it down."
There are many "cooperations" in the future that cannot be clearly defined, so it is naturally impossible to finalize them on paper now.
"Okay." Zheng Zhijie agreed and asked, "Do you want more shares?"
"No need. Sometimes too much is not good. If they develop well in the future, we can find another opportunity." Yang Wendong shook his head and said, "20% is enough for now."
When investing in a new enterprise, you must proceed step by step and not invest too much at one time. Otherwise, it may have a counterproductive effect. Others may think they are capable and may set up other companies or find ways to hollow out the joint venture.
This is also human nature. If he were in such a situation, he might do the same. Many angel round Internet investments in his previous life also had this purpose.
First invest a small amount of money to obtain a small number of shares, so that the founder can feel at ease to make the company's business bigger and stronger, and then when the cost of splitting the business becomes higher and higher, investors will increase their investment. The same is true for traditional industries.
These companies will all be listed in the future, so there are plenty of opportunities.
"Okay, then I will reach a valuation that satisfies both parties as soon as possible." Zheng Zhijie said.
In the following month, nothing major happened to Yang Wendong.
In private, he often invites Bai Yujie to the hotel to discuss the scenery outside the window. In official business, he has been eyeing the investment in Sun Hung Kai and Cheung Kong. In the current real estate market, Yang Wendong is not ready to invest too much, so investing in some future real estate giants is the most appropriate. However, there are only these two companies at present, because these two companies are the only two of the future real estate giants that were very small in the early 60s, but began to rise in the 70s. The core factor is that these two companies seized the real estate crisis a few years later, were bold enough, and desperately hoarded land, and finally turned around and overtook after 68.
As for the others, perhaps some of them can be bought at a bargain price, but the specific situation is unclear, and now these companies are large in scale and their stock prices are at their peak. Yang Wendong will naturally not invest in them. Even if he wants to invest, he will have to wait until the real estate crisis when these real estate companies' businesses are damaged.
On December 12, Zheng Zhijie finally reached an agreement with Sun Hung Kai and Cheung Kong Holdings, investing HK$6 million and HK$230 million respectively to acquire 370% of the shares of each company. At the same time, he will gradually carry out cooperation in various aspects.
In a good mood, Yang Wendong once again made an appointment with Bai Yujie. After some hard work, he felt refreshed.
When the two of them came to the living room to eat some snacks, Bai Yujie asked, "You seem very happy today, what's the matter?"
Yang Wendong said with a smile: "I am in a good mood because I have invested in two real estate companies with great potential."
"Real estate company? Don't you have one? Why do you want to invest in it?" Bai Yujie asked puzzled.
Yang Wendong replied: "I do have a real estate company, but the Hong Kong market is so big, I can't possibly take it all, right? Since there are other peers in the areas that I can't take over, I can naturally choose to invest in a part of it. If they go to operate in areas that I am not involved in, wouldn't it be good for me to get a piece of the pie for free?"
In this world, it is impossible to monopolize many markets, and it is not possible, and the government does not allow it.
Moreover, if his company becomes a super giant in the real estate market, then all the contradictions of high housing prices will be concentrated on himself, which will be counterproductive. It is better to stand behind it. As long as he controls it well, he can definitely earn more than the four major families standing in the front.
"Oh, that's right." Bai Yujie nodded and asked, "Where will you invest in the future? I have some spare money and I want to invest on my own."
"Do you want to invest and become a rent collector?" Yang Wendong asked with a smile.
"Yes, we women must have our own income." Bai Yujie replied.
"Then don't invest now, wait a minute." Yang Wendong nodded, and then said: "As for my future investments, they will mainly be large office buildings, hotels, shopping malls, and street shops. As for residential properties, I will only choose high-end or very large residential properties."
If you don't have much money, you might invest in residential properties so that you can make money from money; but now that you have made a lot of profits through other industries, the best real estate investment target is buying a property, especially in Central, Admiralty, Causeway Bay, Tsim Sha Tsui and other places.
In terms of residential properties, a few high-quality or super-large properties can be developed by ourselves, and the other scattered properties can be handed over to the company we invest in later.
"Forget it, I'll consider the street shops." Bai Yujie said worriedly, "But it doesn't seem to be enough."
"Haha, you can buy a small one. I have a suitable place." Yang Wendong asked with a smile: "How much money do you have?"
"8." Bai Yujie did not keep it secret.
"Not bad, it's so much." Yang Wendong was a little surprised. This amount of money could buy a house in Central.
Bai Yujie said: "I also rely on the pocket money I have saved since I was a child, and the income from participating in sports events. Otherwise, although the salary of a university teacher is not low, it is not this much."
"Your parents are really willing to give you two pocket money." Yang Wendong smiled.
"Of course, a daughter should be raised in wealth, otherwise she will be easily deceived." Bai Yujie glanced at Yang Wendong again and said, "But I was still deceived by you."
Yang Wendong did not answer directly: "I agree with this. Daughters do need to be raised in wealth."
Bai Yujie asked again: "Then where is the appropriate position you mentioned?"
Yang Wendong said with a smile: "Do you know about the Hong Kong Museum? I also invested in it. Before the project was launched, Changxing Real Estate bought a piece of land nearby and built a house. There are many street shops below. The area is not large, and the main feature is snacks. The unit price is expensive, but the total price is not super expensive. Your money is enough for the mortgage."
"Museum? It's really nice. There must be a lot of people going there." Bai Yujie nodded.
Yang Wendong smiled and said, "Well, I'll have someone prepare the information later. Take a look and I'll give you the best spot with a 20% discount."
In fact, it doesn't matter if I give it to her, but Bai Yujie's personality makes her definitely not want it.
"20% off? Can you still make money?" Bai Yujie asked back.
"Of course, you underestimate the profits from real estate." Yang Wendong smiled.
When the real estate market is on the rise, coupled with leverage, the profits are simply unimaginable.
"Oh." Bai Yujie nodded.
On December 12, the Hong Kong Museum officially opened.
Just like the opening of a shopping mall, the museum, as a business organization that attracts tourists and local people, will naturally hold its opening ceremony with great fanfare.
Several large dragon dance teams were dancing in the square in front of the museum. Many media outlets, including Rediffusion Television, also sent people to interview. Hong Kong now has its own large museum, which can be said to be a milestone event in Hong Kong's history. No media outlet would miss it.
As for important customers, there were not many business people coming this time, mainly because the museum had no business relationship with them, so they naturally would not come. However, there were many people from the political circle who came.
Yang Wendong also arrived at the main entrance of the museum very early, waiting for the VIP. At around 8:, many cars passed by the main entrance, and many foreigners got out of the cars.
Yang Wendong immediately stepped forward to greet them and said, "Mr. Governor of Hong Kong, Mr. Trench, welcome to visit the Hong Kong Museum."
PS: Please give me a monthly ticket
(End of this chapter)