Chapter 725: The Beginning of the Layout and Huang

In fact, the revenue of "Harbour City" in the future is not very strong among various businesses in the world. One of the businesses of many top companies can beat "Harbour City";
But in terms of income stability, they are completely different. As long as Harbour City is built, it doesn't have to do anything but collect rent. In other industries, either they are technology giants that must be cautious and careful to avoid being overthrown by garage entrepreneurs, or they are traditional giants that have relied on many years of inheritance and operation to achieve their current results.
No matter which one you choose, if you want to develop well in the long run, you have to spend countless efforts to maintain business development, which is very time-consuming and laborious;

Of course, in terms of influence, this type of enterprise is definitely better than Harbour City, which is also fair. What industry is easy, profitable and influential? There are not so many triangles.

However, Yang Wendong also has the opportunity to develop other industries. Although the future is uncertain because of his early butterfly effect, he still has opportunities. In fact, it is precisely because of this that he needs to control more real estate wealth such as Harbour City, Hong Kong, mainland China, Singapore and even Japan.

Only in this way, when other industries face strong enemies, he can steadily extract enough wealth from these real estate industries, and then he will be able to do research and development, industrial production, money-burning wars, etc. with ease;
In the technology industry, or other traditional industries, success is not achieved just by having money, but if the direction is almost right and there is sufficient capital, the probability of success will inevitably increase significantly. For example, in the history of Samsung, if it were not for the support of the South Korean government and Wall Street, the so-called counter-cyclical price war would not have been able to kill the Japanese electronics giant and would have killed itself long ago.

After the successful privatization of Hutchison Whampoa, Yang Wendong’s layout in the Hong Kong real estate market will be almost complete in the short term.

Although you can still take advantage of the opportunity to buy at the bottom, given the current scale of Changxing Real Estate, it generally will not participate unless it has a particularly prime location or a large area of land.

On the contrary, this economic crisis can be said to be a feast for stock market investment, because the decline of the Hang Seng Index is far greater than that of real estate.

Instead of spending money on real estate and waiting to develop it later, it is easier to buy stocks of various real estate companies and directly enjoy the economic benefits after the real estate prices recover in the future.

In addition, given the large scale of the Changxing Group in the real estate market, it would be unnecessary for it to continue competing with small and medium-sized real estate companies for properties. It would be easier to do so through investment.

Yang Wendong called Fang Xianmin and said, "Old Fang, for the next period of time, we will just focus on real estate companies that hold a large number of properties with our funds. We can buy these stocks appropriately. We don't need to pursue too much. We can divide the funds in the stock market through a multi-category, small-quantity model."

Although there is great uncertainty about the beginning and end of this economic crisis due to the butterfly effect, the economic laws remain unchanged. The Hang Seng Index is now fluctuating around 200, and it has been almost a year and a half, so the crisis is about to end.

Through this crisis, he has successfully acquired and privatized Wharf Holdings, and also appropriately bought some high-quality real estate at the bottom, which is enough.

The next step is to wait for the economic recovery. Now, we can take advantage of the lowest stock market time to make some more acquisitions. These have no strategic significance. They are purely for making some money. Otherwise, it would be a big loss to keep the cash in the bank and earn interest.

Fang Xianmin naturally understood what his boss meant and said with a smile, "Okay, Mr. Yang, I'll arrange it right away."

Yang Wendong added: "Next, keep an eye on Hutchison Whampoa. Hutchison Whampoa has not had a good time recently, right?"

Among several super foreign banks in Hong Kong, he had taken away Wharf Holdings from Jardine Matheson, and it was unlikely that Hutchison Whampoa would have a chance in the short term; Swire Properties was not listed in Hong Kong, and his family almost controlled 50% of the company, so outsiders had little chance; as for Wheelock, he looked down on it, especially since the Zhang family already controlled Wheelock at that time.

Only Hutchison Whampoa, with his help in the early years, became even larger than in its original history. However, the price of such a large scale was heavier debt.

Normally, it was fine as long as the assets were sufficient to exceed the liabilities, especially since Qi Dezun was best at pushing up the stock market. However, after a year and a half of economic crisis and the oil crisis that lasted for half a year, no matter how capable Qi Dezun was, he could not withstand it. Hutchison Whampoa's share price was not doing well, and its various businesses were naturally affected by the Hong Kong and global economic crisis.

Fang Xianmin said: "Yes, Hutchison's market value has recently fallen below HK$15 billion, and its debt is as high as HK$20 billion, which can be said to be insolvent.

However, with such a huge debt, the creditor banks dare not burst it at will, and everyone can only hope that Qi Dezun can come back to life.

Mr. Yang, do we need to put pressure on Hutchison Whampoa through Hang Seng Bank?"

Hang Seng Bank can be said to be half of the Cheung Hing Group. Due to restrictions in Hong Kong's banking laws, the Cheung Hing Group cannot do business directly with Hang Seng Bank. However, Hutchison Whampoa does not belong to the Cheung Hing Group, but is only a partner. Therefore, there has been a lot of cooperation between Hutchison Whampoa and Hang Seng Bank before.

In fact, they all know what their boss is thinking, but unless the boss says it, they won't say it out loud.

Yang Wendong asked: "How much debt does Hutchison owe to Hang Seng?"

Fang Xianmin replied: "About 4.8 million Hong Kong dollars."

"It's quite a lot. Will such a large amount of funds have a big impact on Hang Seng?" Yang Wendong asked. Fang Xianmin said, "It's not a problem for now. After all, it's not a bad debt. Hang Seng still has a lot of funds. Hutchison Whampoa shouldn't have any problems right away."

"With Qi Dezun's ability, I think he can still hold on for a while." Yang Wendong smiled and said, "We just need to wait and see."

Fang Xianmin asked again: "Should we take advantage of the current low stock price and do a reverse buyback of Hutchison's shares?"

When Hutchison Whampoa’s stock price was at its peak earlier, Changxing Financial cashed out almost all of its stocks and obtained at least HK$10 billion in funds.

According to Hutchison’s current market value, the 10 billion is worth 65% of the current total share price. Of course, this is just a comparison. If it is actually a real acquisition, that would definitely be another matter.

Yang Wendong shook his head and said, "There is no rush for now. Hutchison's biggest problem is not the economic crisis, but the fact that it was too chaotic during its previous expansion. A lot of its businesses were in a mess, and the economic crisis has only brought it back to square one.

Even when the crisis is over, they won’t be able to return to normal so easily, so we’ll have to wait and see what happens next.”

Even though in this life, he appropriately participated in and helped Hutchison Whampoa make some high-quality business investments, such as the acquisition of Whampoa and the investment in Hong Kong Electric, these two businesses are just a drop in the ocean among the hundreds of businesses of Hutchison Whampoa in the past few years.

In other aspects, there are too many messy businesses, involving hundreds of types. Qi Dezun's original purpose of acquiring these businesses was not for operational economic purposes, but to expand the business, make the financial data look good, thereby raising the stock price, and then operating with loans.

When the economy is booming, this is fine, but once the economy collapses, these businesses become a huge burden, and at the same time, the collateral for loans taken out at previous high stock prices disappears, which leads to debt being attacked from all sides.

Historically, after the economic crisis, Hutchison still showed no sign of recovery, which naturally led to Qi Dezun being kicked out of the board of directors.

"Okay, Mr. Yang." Fang Xianmin agreed and said, "But I plan to contact some of Hutchison's current shareholders first, and when the time is right, I can act quickly."

"Okay, Hutchison has quite a lot of shareholders now, so it will be convenient to communicate in advance." Yang Wendong nodded.

Increasing one's own capital through share expansion financing is not unique to Wharf Holdings. Hutchison Whampoa also likes to do this, and even some Chinese-funded listed companies do the same.

However, Chinese-funded listed companies generally control their equity to ensure that their shares are not diluted too much. For the first generation of Chinese-funded enterprises, controlling rights of their own company are still very important, so even if they raise funds, the amount will generally not be large.

But it is a different story for many British companies. Except for Swire, many other British companies basically don’t care how many shares they have in their hands. They only like to dilute their shares madly to obtain funds and then develop large-scale projects.

Firstly, this is because only by doing so can they increase their economic influence. Secondly, when a listed company becomes large, although the stock is diluted, as long as the controlling rights are still in their hands, they can use legal cooperation methods to allow their company to participate in some large projects through various methods, thereby easily making more profits.

This is also the normal routine of many listed companies, but the originally safe British capital group lost its controlling rights due to changes in the Sino-British structure in Hong Kong. This is why in past history, so many Chinese capitals were able to challenge British giants. Otherwise, if British capital controlled most of the shares of their own companies, no matter how strong the Chinese capital was, it would not be possible to succeed.

Fang Xianmin smiled and said, "Okay, I will sort out the information of Hutchison Whampoa shareholders in the shortest possible time."

"How is the relationship between HK Electric and Hutchison Whampoa recently?" Yang Wendong asked again.

Fang Xianmin said: "Hutchison now nominally controls HK Electric, but HK Electric's management obviously ignores Qi Dezun, and because of the economic crisis, HK Electric's real estate business development has encountered problems, and now they are also arguing.

Qi Dezun also wanted to borrow money from Hong Kong Electric to alleviate Hutchison's crisis, but it is said that his request was also rejected.

"Well, okay. It's a good thing for us that they don't get along." Yang Wendong said with a smile.

……

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(End of this chapter)

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