Chapter 425: The Terrifying Cash Flow of Changxing Real Estate

Chapter 425: The Terrifying Cash Flow of Changxing Real Estate

Chapter 425: The Terrifying Cash Flow of Changxing Real Estate (asking for monthly tickets)

There was nothing else important happening in the UK, so after a day of sightseeing, Yang Wendong and his group returned to Hong Kong. It was already December 12nd, and in the blink of an eye, another year had passed.

There were also bursts of drizzle in Hong Kong, which was very refreshing, but it could not suppress Hong Kong's soaring housing prices, which once again hit a new high.

On the 23rd, after Yang Wendong arrived at Changxing Building, Zheng Zhijie from Changxing Real Estate hurried over.

"Sit down. I bought some local tea from England." Yang Wendong greeted him while making tea. He said, "Although I think the taste is not as good as the ones in the mainland, we also need to change the taste occasionally."

The Chinese in Hong Kong also love to drink tea, but although it is close to the mainland, for a long time, tea from Britain or other British colonies has become the mainstream choice of Hong Kong people;

The reason is not because the situation abroad is better, but because various reasons in the mainland in the past few decades caused traffic chaos and made exports difficult. It was not until the 50s that things gradually improved, but the habits of many people in Hong Kong are difficult to change.

But for Yang Wendong, when he first came into contact with tea, he bought tea directly from the mainland, and the people around him did the same.
"Okay." Zheng Zhijie said with a smile: "I have drunk a lot of British Da Hong Pao in recent years. British foreigners especially like to drink this."

"Well, I also had someone send some to Sanders." Yang Wendong said: "Although we don't have much cooperation with HSBC for the time being, we still need to manage the relationship better in the future."

After all, HSBC is Hong Kong's "quasi-central bank". Even if its asset size increases ten times one day, it will still need to cooperate with HSBC for its business in Hong Kong, and even some overseas investments can also be made through HSBC.

Compared with other British capital, HSBC can be said to be Yang Wendong’s best British capital partner. It has strong strength. If history remains unchanged, HSBC will become one of the top ten banks in the world in the future.

The only pity is that HSBC, as a "quasi-central bank", is protected by Hong Kong law. Even if I have a lot of money, I can't buy more than 1% of the shares. This is different from Jardine Matheson. But in the short term, I don't need banking business. In the future, there are plenty of opportunities to set up a bank myself.
Zheng Zhijie replied: "I have met with Sanders several times recently. This foreigner is just like us. He is not optimistic about the Hong Kong real estate market. However, as a bank, they cannot invest."

"Well, he doesn't care. Anyway, if the real estate market goes up, they can make money steadily. If they lose money, who dares not to pay back HSBC?" Yang Wendong smiled and said, "There are many stable income assets in Hong Kong, and HSBC is one of them."

Hong Kong has many stable assets, such as gas, power generation, port terminals, etc., which will definitely not lose money. HSBC is one of them.

Zheng Zhijie said: "Yes, Mr. Yang, why don't we also acquire 1% of HSBC's shares? Anyway, we have a lot of cash in hand now."

"There's no rush for that." Yang Wendong paused and said, "Have you cashed out all the non-core real estate properties you own?"

Zheng Zhijie replied: "Yes, except for the Central property and some properties in prime locations, I have cashed out all the others. I currently have about 1.4 million Hong Kong dollars in my hands. The 300 million US dollars you requested to be remitted to the United States is not included in it."

"The cash flow is really high. In other words, you have earned a total of HK$1.5 million in the past few years?" Yang Wendong asked with a smile.

Starting from 59, Changxing Real Estate began to hoard land moderately. Part of the funds were mobilized by Yang Wendong, and the rest was earned from developing community properties. Then, the company used bank leverage to purchase land, rented out the property to pay off the loan, and then waited for appreciation.

Over the years, relying on strong capital and enough courage, he purchased large tracts of land and properties, and then waited until the price reached its peak to cash out. The profits he earned were astonishing, even not less than the achievements of Changxing Industrial in recent years.

"To be precise, it's more than that." Zheng Zhijie continued, "I also bought a lot of land from Changxing Industrial, Carrefour, and Honor Electronics, and then transferred it to them at the market price.

For example, our industrial park in Kwun Tong has a large area. Even if it is industrial land, it would cost at least 60 to 70 million yuan at the current price.”

"Forget about that piece of land. The larger the area, the harder it is to cash out." Yang Wendong shook his head and said, "Unless Hong Kong's industry fails in the future, or the labor cost is too high, Changxing Industry needs to move away, then this piece of land will have a chance to be developed."

Although the core industrial base of Changxing Group has a large area of ​​land, it is impossible to develop it into real estate in the next 20 years. Only when Hong Kong's industry really fails and moves to the mainland in the 80s, will this land become vacant.

Judging from the area, it is definitely similar to Li Jiacheng's Whampoa Garden in history. The Whampoa Garden was developed in the 80s and made a net profit of 50 billion + a 170 million square foot commercial plaza, and also has property management business for more than households.

Of course, the production profit of Changxing Industry is not lower than that of real estate development. Although wages in Hong Kong will rise in the 70s, Changxing Industry can still afford it. After the reform and opening up in 78, it can also be partially transferred. The mainland is the most suitable industrial base. Choosing Taiwan and Singapore now is also a last resort. After all, it will take more than ten years for the reform and opening up, and it is impossible to just wait.

Zheng Zhijie nodded and said, "Yes, the core of our group is still Changxing Industry."

"It's not certain in the future, it may be Honor Electronics." Yang Wendong added: "Honor has expansion plans, you can keep an eye on Hong Kong Island to see if there is a suitable factory area;

According to my estimation, once a real estate crisis occurs, the Hong Kong government’s finances will be in trouble. At that time, we will take the initiative to buy the land that Glory needs.”

The Hong Kong government rarely has a fiscal surplus, and if it does, it is only a little. The logic is simple, because if a department does not use up its budget this year, it will be gone next year. This kind of thing has happened in many eras and many institutions.
Once an economic crisis occurs, there will be fewer real estate auctions, and the worsening economy will lead to a reduction in normal tax revenue, which will inevitably cause financial strain on the Hong Kong government. Therefore, every time this happens, the Hong Kong government will relax a lot on real estate auctions, and even allow real estate companies to negotiate with the Hong Kong government on which piece to take.

"Yes, I will discuss it with Mr. Wang." Zheng Zhijie agreed.

Yang Wendong asked again: "So, in which banks are our funds now?"

Zheng Zhijie said: "Part of it is in HSBC, part is in Hang Seng Bank and Bank of East Asia. The funds are in the same bank as where we got the loan for these properties."

"Well, the funds of Chinese banks are gradually being mobilized." Yang Wendong added, "Transferred to HSBC, Standard Chartered or overseas Citibank."

"Mr. Yang, are you not optimistic about Chinese banks?" Zheng Zhijie paused and asked.

"Yes." Yang Wendong said, "The main business of Chinese banks is real estate. Once there is a problem with real estate, Chinese banks may also have problems. The situation of Liao Chongxing Bank in the past may also recur. I need to be prepared. It may not happen, but we don't need to gamble on it."

The run on Hang Seng Bank was actually a very strange thing, because originally it was only Mingde Bank that had problems, and it only had a slight cooperative relationship with Hang Seng.

But for some reason, Mingde's problems suddenly turned to Hang Seng, which eventually led to a run on Hang Seng Bank, forcing it to sell itself. Even after Hang Seng, other Chinese banks were affected one after another.

This incident is expected to happen again, but his appearance has a great impact on Hong Kong's business community. He also doesn't know whether some Chinese banks will really go bankrupt because of this. For security reasons, he must transfer the funds away.

The departure of bank funds will also give him sufficient say if Hang Seng is hit by a run in the future. Otherwise, if Hang Seng runs out of money, it will be useless even if he wants to use the funds in his account for emergency.

"Okay, I'll do it right away." Zheng Zhijie added, "If we do it this way, the bank will definitely find out. Although they can't stop it, it will make too much noise and may cause other reactions."

"It doesn't matter. My acquisition in the United States will be announced soon." Yang Wendong shook his head and said, "When the time comes, I will say that these funds are used for overseas mergers and acquisitions. Even if others suspect it, there is nothing they can do."

The acquisition and capital increase plans in the United States during this period can be regarded as a suitable excuse for transferring Hong Kong funds out of Hong Kong and exchanging them for US dollars. Otherwise, the Hong Kong government would definitely prevent such a large amount of US dollars from leaving.

The so-called free convertibility is also relative. Moreover, Hong Kong in this era is not an absolute free trade.
Zheng Zhijie said: "This is a good idea."

"Okay then." Yang Wendong nodded and said, "These are your next tasks. Let's wait and see when the Hong Kong real estate crisis will occur."

The course of history may not change, but the butterfly effect may affect the timing of historical events.

Yang Wendong also wanted to know how big an impact his butterfly effect would have.

PS: Ask for monthly ticket

(End of this chapter)