Chapter 653: Hutchison Whampoa Acquires Hong Kong Electric

After chatting with Pao Yu-kang for a while, the two separated again. Yang Wen-tung chatted with Li Jia-cheng, Hu Ying-xiang and others, mainly discussing the real estate issues in Hong Kong.

After a conversation, Yang Wendong also knew that these people seemed to be a little wary of the future of Hong Kong real estate, thinking that there might be problems, and they also wanted to understand Yang Wendong's meaning;
Yang Wendong naturally expressed a similar idea and asked them to take care of it themselves. In fact, even he didn't know when the next crisis would break out and what would be the trigger. This was the only economic crisis he was not sure about. When the next one came in 1982, he would know it clearly.

The opening ceremony of the wharf was mainly attended by the Governor's Office and the heads of various wharves. Yang Wendong, as the boss behind the scenes, did not participate too much. It was mainly left to Zheng Zhijie and the heads of the wharves. He just came to show off his face. By the way, it was rare to have such a scene of wealthy businessmen from all over Hong Kong gathering together, so he came to communicate with them.

TVB and many newspapers and media in Hong Kong also came. In addition to filming the celebration ceremony itself, many reporters also visited everywhere, trying to interview wealthy people from all walks of life, especially those who are experts in real estate or finance, because a word from these people may become headlines and even affect the stock prices of some listed companies. It is also a hot topic that many Hong Kong citizens are paying attention to nowadays.

However, in such a large event, there are not only security guards, but also a large number of police to maintain order. If the political and business groups are unwilling to be interviewed, reporters cannot approach them;

The whole ceremony ended at noon. As the people from the Governor's Office left, everyone went home. However, Qi Dezun found Yang Wendong and said, "Mr. Yang, would you like to have a simple meal together at noon?"

"Okay." Yang Wendong nodded and agreed.

The recent acquisition of Jardine Matheson Holdings has made Jardine Matheson Group the most prosperous in Hong Kong. However, Hutchison Whampoa is not to be outdone. During the same period, it acquired more than 20 companies in just over a month, including three listed companies. Of course, all the acquisitions were made in good faith by Qi Dezun. Even if they were made with bad intentions, some small companies were forced to accept it as good faith.

The scale of Hutchison Whampoa has expanded like a bubble, and its market value has exceeded HK$30 billion. Yang Wendong's early investment of less than 2000 million has now turned into more than 5 million, a 20-fold increase. This investment efficiency is something that Buffett cannot match in the short term.

The two of them came to a nice hotel in Kwai Chung and entered a private room. Qi Dezun smiled and said, "Mr. Yang, this hotel is also owned by Huang and I."

"Are you also interested in a small business like a restaurant?" Yang Wendong asked.

Hotels are star-rated and have a wide range of businesses. Big capital may participate in them to some extent. However, simple restaurants are generally not big. Single properties generally do not have very high revenue. Small and medium-sized capital may be interested, but big capital generally does not like them.

Unless they are professional chain stores, they will generally adopt the franchise model. However, Chinese food is diverse and regionally different, so it is difficult to form a standard similar to KFC and McDonald's. Therefore, even if the mainland economy developed to the second largest in the world in the past life, there were no large-scale chain restaurants within it.

This is only possible if it is a small store like Shaxian snacks, braised chicken, and pork trotter rice.

Qi Dezun smiled faintly and said, "I'm just investing for fun. I'm not investing to make money, but to make the financial statements look better so that the stock price can be higher."

"Well, but I still suggest you not to focus all your attention on the stock market. Actual business is the most important." Yang Wendong reminded.

Qi Dezun said: "I don't agree with this. Only when the stock price is high can I raise funds and pledge stocks to obtain funds, so that I can develop more projects and form a virtuous circle."

After listening to it, Yang Wendong did not refute it, and smiled and said: "That's right, your method does work."

So many listed companies in Hong Kong like to increase their market capitalization, not only because the paper wealth looks good, but also because banks in Hong Kong tacitly allow stocks to be used as collateral, usually at half of their value.

In other words, the stock of a company with a market value of 20 billion can theoretically be pledged for 10 billion in cash.

Therefore, whether it is the current Hutchison Whampoa or the future Carrian in history, they are all desperately expanding various messy businesses, increasing the stock market value and then going to the bank for loans, and then developing new projects after getting the funds. If the project is successful, the stock price will rise again, and then continue to borrow or raise funds through other means, etc., forming a virtuous circle.

With this model, if it is operated well, wealth can grow exponentially as the stock market and local markets continue to rise. This is how Chen Songqing built a consortium worth nearly 10 billion Hong Kong dollars in just a few years.

But once there are problems in the market, the stock market value falls, and banks require additional collateral or early repayment, the entire business will inevitably plummet. In history, Hutchison Whampoa's market value fell from 70 billion to or million and was eventually acquired by HSBC because of the drawbacks of this approach.

Now, with the help of Yang Wendong, Hutchison seems to be playing even harder, but he doesn't care. The better it is now, the harder Hutchison will fall in the future. Qi Dezun smiled and said, "Mr. Yang, I asked you out this time because I want to discuss with you that Hutchison is going to acquire Hong Kong Electric."

"How many shares of Hong Kong Electric do you have now?" Yang Wendong asked.

Qi Dezun said: "About 16%. It will be difficult to acquire more. Although HK Electric does not have a major shareholder family, many shares are still in the hands of many shareholders. These shareholders have close ties with the management, so I am ready to make it public."

"Publicly, you are not planning to imitate Jardine Matheson and carry out a major merger and acquisition, right?" Yang Wendong asked with a smile.

As this is something that has never happened in Hong Kong's history, he is also curious about how it will develop. In fact, for him, this is also quite interesting. Life is more interesting when there are some variables;
Whether it is the future industries in Hong Kong or the global technology industry, etc., the history 80 years later will probably be completely different because of his butterfly effect, and he has been mentally prepared for this.

Qi Dezun shook his head and said, "Of course it's impossible. Hutchison Whampoa is not as good as Hong Kong Land, and Hong Kong Electric is much better than Dairy Farm. In fact, Hutchison Whampoa is only slightly better than Hong Kong Electric.
I am going to make a friendly takeover and negotiate with the management of HK Electric to acquire about 30% of HK Electric's shares, and then work together to develop HK Electric's land. Mr. Yang, you know the quality of HK Electric's properties. Once this is done, Hutchison Whampoa's stock will definitely rise sharply, and I will be able to cash out more funds from the bank. With the help of the development of HK Electric's land, I may be able to make Hutchison Whampoa one of the top British companies."

"A friendly takeover is indeed the best method." Yang Wendong agreed, "But are you sure that the management of HK Electric will agree?"

In fact, if any capital wants to acquire a company, no one will be willing to go through all the trouble if it is done in good faith. This will minimize the cost and ensure a smooth takeover after the acquisition is successful.

In Hong Kong's history, so many hostile takeovers have been successful. On the one hand, it is because of the transfer of power between Huaying and Hong Kong companies. On the other hand, the core business of Hong Kong companies is real estate, which is relatively simple to operate. The hostile acquirer can take over smoothly after the acquisition is successful, so there is no need to worry too much about this aspect.
There are a few exceptions, such as when Li Jiacheng took over Hutchison Whampoa. Even though he became a major shareholder and had the support of HSBC, Li Jiacheng could only be a shareholder and participate in the board of directors. The rights were still handed over to the original team. Even when there was a conflict between the two sides, Li Jiacheng chose to back off. It was not until four years later in 1983 that the Chinese team controlled by Li Jiacheng became familiar with the business, won over some of the original Hutchison Whampoa people, and held nearly 40% of the shares, that they successfully took charge of Hutchison Whampoa.

HK Electric's power generation business is even more professional. Without the original team, it would be impossible to do it.

Qi Dezun said: "I can only give it a try. If I am not too far behind, I can still become its major shareholder. The income of HK Electric Power Generation is still good, and my requirements are not high. I just need to obtain real estate development."

"That's fine." After thinking for a moment, Yang Wendong asked, "Qi Dezun, what are your future plans? Are you really planning to completely acquire HK Electric, or just indirectly control it?"

Qi Dezun shook his head and said, "This is too far away. I will first become a major shareholder and join the board of directors, and then consider future matters."

Yang Wendong said: "Okay, if you need funds, Hang Seng will give you a quota."

Over the years, with the help of Yang Wendong, Hang Seng Bank has not only developed second only to HSBC in Hong Kong, but has also developed very well in some Asian countries. The first difficulty for many banks to enter foreign countries is that they have no local companies to cooperate with. Yang Wendong's capital has already been invested in many Asian countries, and cooperating with Hang Seng Bank has facilitated the first step.

Allowing Hang Seng to cooperate more with Hutchison Whampoa is also part of Yang Wendong's plan. If Hutchison Whampoa encounters problems in the future, Hang Seng will also be one of the largest creditors. This will also prevent HSBC from having a monopoly in debt control.

"Okay, thank you Yang Sheng." Qi Dezun didn't think much about it.

Over the years, Yang Wendong treated him well. On the one hand, after investing in Hutchison Whampoa, he never interfered with Hutchison Whampoa's operations. On the other hand, he often helped him with funds, resources, and connections, which made Hutchison Whampoa's scale grow.

Of course, he himself also received huge returns from the stock market, but this is as it should be. Otherwise, who would invest?

In mid-June, the Hong Kong market once again broke out a piece of news that shocked the whole city;

Hutchison Whampoa Group suddenly announced that it already holds nearly 20% of the shares of Hong Kong Electric Company Limited. As it is optimistic about the future of Hong Kong Electric Company Limited, Hutchison Whampoa will continue to increase its holdings in Hong Kong Electric Company Limited, but the announcement did not specify to what extent it will increase its holdings.

Influenced by this news, HK Electric’s share price immediately surged by 18%.

PS: Please give me a monthly ticket
(End of this chapter)

previouscatalognext