The Birth of Shanghai's First Conglomerate

After the entertainment industry gala ends.

Chen Pingsheng still saw many old acquaintances, such as Yang Mi and Liu Yifei.

For example, Zhao Liying, Liu Shishi, and others.

The entertainment industry, which used to be so popular, has now been completely overwhelmed by short videos and short dramas.

He shook his head and didn't think about it anymore.

Days passed by in a blur, and before we knew it, it was mid-October.

He was brewing tea at the group's headquarters, watching the clouds drift and gather in the bustling metropolis of Shanghai.

A major piece of news has come from the real estate industry: the once-glorious Hengda Xu belt has completely collapsed.

The amount of debt he revealed this time is as high as two trillion.

What concept?

Numbers beyond imagination.

This also dealt a heavy blow to the already struggling real estate industry.

To put it simply, this debt is so outrageous that it would make most people's heads explode.

Belt Bro really went too far this time.

Along with the listed companies that were dragged down by Xu, there are at least 30, if not 17 or 18, listed companies.

The news shocked the entire financial world.

This is not the most terrible.

The most terrifying thing is that in some places, just a gate is built, but all the houses are sold out.

With so many homebuyers still waiting to take possession of their properties, you can imagine how big the potential conflicts are.

The matter has to be resolved; Belt Bro has already been restricted in his freedom.

As for his car manufacturing project, it was nothing but a joke.

Even Peng Ying called him, saying that many of his relatives in his hometown had bought Hengda's off-plan properties, and now what should he do?
What else can I do?
Let's just wait for the higher-ups to clean up the mess.

Peng Ying then asked how many years that would take.

In fact, Chen Pingsheng didn't know either; it could be three years, or it could be five or ten years.

Who can say for sure?
If it's during a period of rapid price increases, then these unfinished, abandoned buildings can easily find buyers after two years.

Once housing prices stabilize or even decline...

It's impossible for any private company to take over; that wouldn't be a good thing, it would be being taken advantage of.

Those who suffered the most were definitely the people who paid the down payment and made timely mortgage payments but couldn't get the house.

Without experiencing their suffering firsthand, one cannot truly grasp the despair felt simply by looking at a report on a table.

Tang Jing also came to find him, saying that it was Song Shuiqing's husband's family, Tang Li's mother, who came to see him.

They couldn't stop her no matter what. Accompanying her were Su Xiaoxi's mother and Su Changlin, the chairman of Su's Real Estate.

"Arrange for them to go to the reception room."

Chen Pingsheng knew that these people came to him mainly because they couldn't hold on any longer. He had actually said before that they shouldn't come to him unless they were completely unable to hold on.

Once Xu Pi's bomb explodes, their lives will be in big trouble.

The most obvious change is that no one dares to buy off-plan properties anymore.

This is tantamount to severely cutting off the cash flow of these real estate developers.

If this had happened a few years ago, we wouldn't have had such a big problem. But now, not having money is a real problem.

The four people waited in the reception room for about half an hour before Chen Pingsheng finally arrived.

It wasn't that he was putting on airs; he just wanted them to understand that if they wanted to borrow money from him, they shouldn't talk about those casual friends and relatives.

They need to bring out their assets, such as undeveloped land or commercial real estate.

If someone asks him for a loan with interest without any explanation, isn't that treating him like a fool?

Talking about interest now would mean losing the principal.

Tang Jing sat down next to him, holding a notebook in his hand, ready to take meeting notes.

Chen Pingsheng said, "I know why you're here, and I know your current situation. I won't waste any more time on small talk. I'm not going to lend you money, but I can acquire some of your assets through other means. Now you can speak."

It remains as strong as ever.

There was nothing he could do; he couldn't find a reason to refute it, since he was the only one holding the big sum of money at this time.

After thinking for a moment, Mrs. Tang said, "Mr. Chen, you have the Global Economic Research Institute, so nothing can be hidden from you. I'll be frank with you. Our Tang family's total debt is 190 billion, and we also have land reserves worth no less than 120 billion. If we include the unsold houses and commercial assets, our total assets are significantly higher than our total liabilities."

"There's no point in saying all this."

Chen Pingsheng said, “Everyone knows that you still hold a lot of land reserves. If you calculate this year, it may indeed be worth 120 billion, but next year it may only be worth 100 billion, and after another year it will probably only be 80 billion. The biggest problem now is that land assets will depreciate over time, but debt will not. On the contrary, the interest generated by the debt every day is an unimaginable figure for you.”

"I believe I don't need to calculate the difference between this positive and negative."

Tang's mother and her son Tang Li's expressions changed repeatedly, and the actual situation was indeed as Chen Pingsheng had said.

This is the most troublesome part, and the last glimmer of hope in the hearts of the Tang and Su families is waiting for the higher authorities to come and save the market.

There are many ways to rescue the market, the most direct of which is nothing more than opening the floodgates.

Another option is to provide them with bank loans for working capital, or, like in 2008, to issue trillions of yuan in new funds.

“My Tang family has two decent residential land plots, one in Jing’an and one in Jinshan. We acquired them at the end of last year, one for 128 billion yuan and the other for 98 billion yuan. I can sell them at the original price.”

It's a normal practice for all real estate companies to stockpile land in advance every year.

However, Tang's mother underestimated Chen Pingsheng. Although he wouldn't go so far as to kick someone when they're down.

But they certainly won't be the ones left holding the bag; they won't be the ones buying the land at the end of 19.

To be honest, land prices were at a high level at that time.

In the future, the gap between high and low housing prices will be quite severe.

The core areas can still hold up somewhat, but those slightly more remote locations are simply unbearable to look at.

In this situation, if he were to go to ground at the original cost, wouldn't he be a fool?

"To be honest, last year I had Shui Qing repeatedly remind your Tang family to sell off everything that should be sold off. I really didn't expect that you would still dare to spend tens of billions to hoard land under such circumstances."

Chen Pingsheng shook his head and said, "Our group, including myself, has already assessed this situation. Perhaps in less than three years, housing prices will return to the level of 15. You are now selling the land to me at the price of 19. Tell me, who am I supposed to ask to make up for the price difference of these four years?"

The business world is very pragmatic; Chen Pingsheng would never spend billions more for no reason just because of his relationship with Song Shuiqing.

That would be truly foolish.

Besides, even if the Tang family sold these two plots of land at the original price, they would still lose a huge amount of money.

Nothing more than bank interest.

Real estate developers mostly rely on banks and pre-sale funds from homebuyers for their cash flow.

Normally, after purchasing land, a bank loan is applied for using that land immediately.

Then use that money to develop the land; once the land is leveled, build a sales office and start selling.

After going through the entire process, real estate developers can earn a net profit of 10% to 15%.

This is under ideal circumstances, but the current situation is that the housing market is not stagnant.

The bank interest must be paid, the land is stuck here, and if it can't be sold after development, it will be even worse.

Regardless of what happens, the Tang family can take these two plots of land and sell them back to him at the original price, even if they do nothing with them.

They'll lose at least 1.7 to 1.8 billion.

He bought it at a high price now, and if he doesn't take out a loan, it will be interest-free.

They'll lose money on the price difference for four years.

The housing price in 15 can only correspond to the land price in 15.

Tang's mother almost gasped. She wanted to ask if this was serious. Going back to 15, let alone the Tang family, would be finished.

Of the top ten real estate developers in Shanghai, will two still survive?
The Su family, with even higher debt, will definitely die even faster than the Tang family.

The Tang and Su families parted on bad terms, mainly because Chen Pingsheng's asking price was too outrageous.

They would suffer a significant loss if they sold the land at the 15-year land transaction price.

Don't be fooled by the seemingly glamorous image of real estate developers; that's only under the condition that nothing goes wrong. Once something does go wrong, nothing can be stabilized.

After they left, Tang Jing asked him, "Big Boss, why did you decide to acquire so much land?"

"Of course it's used to build houses."

Chen Pingsheng said, "With so many employees, if we factor in bank interest and land premiums, most of my ordinary employees can still settle down in Shanghai. If we don't factor in these inflated figures, Jinshan alone would cost 30,000 to 40,000 yuan per square meter. Add in the shared area, and you'd probably only be contributing to this one house your whole life."

The small amount of money employees have is not enough to squeeze out all the excess in the real estate market.

Only he can do it, and there are too many employees who hope he can get the land back and build houses.

The houses that Tengying had built before were not nearly enough.

Now, a new batch of villa districts has been built.

As the boss, he can't just think about himself in everything.

……

When Tang's mother left, she was furious. She thought Chen Pingsheng was not sincere at all.

They actually tried to scare her by presenting her a land price that would last for 15 years; she believed that day was simply impossible.

Even if houses are difficult to sell, the authorities will not allow housing prices to drop to that level.

Those who have bought houses will also be unhappy.

She has no idea what the outcome would be if housing prices really dropped back to 15 levels.

As for the Su family, they naturally shared the same thoughts.

Even if they were to die, they wouldn't be so quick to sell off their valuable land assets at a low price.

If we sell this, we'll truly have nothing left.

Their biggest hope is that the government will intervene to rescue the market; they can't just watch the value of houses continue to depreciate.

In fact, houses haven't depreciated yet; they're just priced but unsold, unable to be sold.

This is essentially no different from cutting flesh with a soft knife.

I waited and waited, but all I found online was news about Belt Guy.

The two biggest things that "Belt Guy" has done in recent years are building cars and playing football.

Football, in recent years, has seemed to be all the rage.

Any domestic footballer can easily earn tens of millions of yuan a year.

The highest can reach hundreds of millions, or even millions.

The concept of "money-driven football" has been thoroughly explored and understood by "Brother Belt".

If it weren't for the World Cup, ordinary people would probably think that Chinese football has truly reached a world-class level.

When the World Cup comes around, their true colors will be immediately revealed.

After all, you can't bribe the other team's football players with money.

Once money can no longer buy them off, even those small, war-torn countries can easily defeat these domestic football teams.

The belt guy who used to erect statues everywhere is now trembling with fear and in imminent danger.

As for Chen Pingsheng himself, he has already set the standards for everyone who wants to borrow money from him.

They can only raise money by selling core assets.

And the standards he sets for pricing those core assets are as low as they can possibly be.

In late October, Wang Yanfeng's father quietly arrived in Shanghai.

After talking with Chen Pingsheng for almost an hour, I still don't know what exactly was decided.

Old Wang's business assets are still very stable, but it's a pity that this veteran businessman can no longer maintain them.

After he got home, Song Yanxi asked him what happened.

Chen Pingsheng said, "Old Wang plans to sell me some of Wanda Commercial Management's shares."

Wanda Commercial Management is a well-known commercial asset in China, as evidenced by the numerous Wanda Plazas it has developed across the country.

How much did he price it?

"1800 billion, with plans to sell 20%."

"Two years ago, the valuation was around 200 billion."

"almost!"

Chen Pingsheng said, "He wants to complete the domestic A-share listing through a betting agreement. This is a risky move. If he succeeds, all the hard work over the years will be for nothing."

Song Yanxi said, "You can see from this that a lack of cash reserves can be fatal for a company. These companies used to expand by taking out loans like crazy, but now that the situation has changed, they are all under a tight rein. Fortunately, our family has never had any loans over the years."

"Yes, I can only sleep soundly without loans."

Chen Pingsheng said, "We don't actually have much reserve capital, but with Nvidia shares there, we can always withdraw one or two hundred billion US dollars."

It is also because they do not have bank loans that they do not need so much cash reserves.

Since no one is pressuring them to repay the money, they don't need much cash.

"You're planning to buy his Wanda shares?"

"I do have that idea."

Chen Pingsheng said, "No matter what, the rental income from Wanda Commercial Management is still very stable. With so many years of operation, if we take it over, it will be very beneficial to the entire Tengying Group's commercial layout. The most important thing is that the rental income is currently very stable. The only pity is that he is only willing to sell 20% at most. I am not very interested in equity that cannot be controlled."

"It'll be very difficult for you to buy a controlling stake in him, won't it?"

"It's probably impossible now, but who can say for sure what will happen in the future?"

Chen Pingsheng didn't want to think about it too much. If he couldn't buy a controlling stake, then he wouldn't take it.

In the past, if you wanted to make money, you had to grow those small businesses step by step.

But now it's different. If he's patient, a whole host of high-quality companies are waiting for him to choose from.

All he needs is a discerning eye to recognize talent.

Whether it's the Tang and Su families or Wanda Commercial on Lao Wang's side, it's because they haven't completely reached the point of despair yet.

When they get to that point, they'll find that they have no choice but to sell.

For Chen Pingsheng, the most important thing in recent years has been to protect his family's core business.

Losing tens or hundreds of billions a year in traditional sectors is nothing to worry about.

Everyone is losing money, so it's hard for him to remain unaffected.

The most crucial thing is to make Tengfei New Energy a success and truly become a world-class enterprise.

And his heavy investment in AI.

As for the rest, the core issue is large-scale investment.

There's also great news: Nvidia's stock price has surpassed $600 billion.

When the value reaches 700 billion US dollars, he may cash out the principal.

They will likely cash out 1.5% first to meet the group's investment needs for 2021.

In fact, he really doesn't lack money at all.

(End of this chapter)