Return to 1958 and build a century-old giant

Chapter 818 Planning for China Gas
"Is it legal in the mainland market?" Zou Wenhuai asked uncertainly.

Yang Wendong said, "It's definitely not possible now, but since we've already started to reform and open up, we will gradually lift various business restrictions in the future."
So you should first send people to major cities in the mainland to investigate the local economic level, densely populated areas, entertainment preferences, etc., and collect all this information.
Then we just need to wait for domestic laws to further permit foreign investment; that will be our opportunity to enter the market.

The mainland is Hong Kong's only chance to preserve its film industry. Only by allowing a large number of Hong Kong films to enter the mainland can it be more likely to resist the impact of Hollywood blockbusters.

Furthermore, even if Hong Kong cinema declines as it has in the past, it can still invest in cinemas in major cities in mainland China and share in the mainland's economic development, whether in the film industry or the real estate sector.
After thinking for a moment, Zou Wenhuai cautiously asked, "If we do this, won't our people be mistaken for JD?"

"It's not that serious. Your people just need to make arrangements with the local government beforehand. We're just looking at some basic economic conditions; we don't need the details. There are so many cities; you can't possibly do a very detailed analysis anyway," Yang Wendong said with a smile.

Zou Wenhuai nodded and said, "Alright, I'll arrange for someone to process the travel permit right away, and then I'll go to the mainland to take a look."

Yang Wendong said, "Let's start with the big cities. Beijing, Shanghai, Guangzhou, Chongqing, none of these cities are smaller than Hong Kong. Theoretically, even with the current economy there, they can accommodate a lot of cinemas."

Other small and medium-sized cities are not in a hurry for now. Our priority in the future is still large cities, especially those along the coast.

The order of reform and opening up will start with coastal cities. Next year, four cities will become special economic zones, and by 1984, there will be 14.
If Hong Kong could control even a small portion of the cinemas in these 18 cities, it would have provided a very stable source of revenue for the Hong Kong film industry by the 90s.
"Okay, I understand," Zou Wenhuai replied.

Yang Wendong was determined to save Hong Kong's film market, and from an economic perspective, he didn't want a core industry to decline like this.

On a spiritual level, despite being just a city, Hong Kong was able to produce many excellent movies and TV series. This was true until 2010. However, the talent gap widened completely, and Hong Kong's entertainment industry was ultimately ruined.

Of course, he wasn't absolutely certain about this, and could only say that he would do his best. In any case, even if he failed, his investment in cinemas in these places would still yield high returns.
It was the end of April;

On this day, Fang Xianming came to Yang Wendong's office and said happily, "Mr. Yang, the price of gold has risen by about 35% recently. According to the data, not counting interest and taxes, we have made a net profit of about 10 billion US dollars."

"Haha, making money in finance is so easy," Yang Wendong replied with a faint smile. "All the hard work we've put into our various businesses over the years can't compare to what we've accomplished in just a few months."

Fang Xianming said, "Yes, that's why, whether in Hong Kong or the United States, too many people are unwilling to open factories and instead invest in stocks and real estate."

“Yes, but we still need to focus on real businesses. No matter how much money we make from gold, it will eventually have to be invested in real businesses,” Yang Wendong said with a smile.

Money, if it's just numbers in a bank, has no meaning to him. It's only when it's transformed into huge factories and skyscrapers, creating jobs for tens or even hundreds of thousands of people, and the industry itself continues to generate profits, that's what makes it an asset.

The returns from gold will be very high, far exceeding any of his previous opportunities. Once this money arrives, his plans for real businesses may be restarted.

Fang Xianming smiled and said, "Congratulations, Mr. Yang. However, now that we have made a small profit, should we take a step back and operate to break even?"

"No need, just wait. When the time is right, I will let you make your move," Yang Wendong said, shaking his head.

The so-called principal protection means that, regardless of the type of financial investment, once a profit is made, the principal, or at least a portion thereof, is cashed out to avoid unforeseen circumstances.
This is normal practice. Not everyone has the ability to foresee the future, and no one can guarantee that the industries they are optimistic about will continue to rise.
Even if the future internet industry is even more insane than gold is today, venture capitalists will still try to cash out their principal before or even before an IPO, as this is the most basic risk control measure.
A company that lacks this risk control principle can be ruined even if it succeeds ten times, just one loss will wipe it out.

Therefore, Fang Xianming's idea cannot be said to be wrong; on the contrary, it is correct.
However, Yang Wendong knew the future and was certain that his existence could not affect international gold prices. Even if it did, it would only affect the final amount, not the trend.

"Okay, Mr. Yang." Seeing his boss's firm stance, Fang Xianming had no choice but to remind him to control the risks. Now that they had won, they needed to know when to stop.

"Don't worry, I'm quite confident." Yang Wendong added, "Besides the gold, there's another matter I called you here for. I want to acquire Hong Kong and China Gas. What do you think?"

Hong Kong and China Gas is the only gas company in Hong Kong with a monopoly. In the early years, Hong Kong's gas supply was provided by it.

"Hong Kong and China Gas?" Fang Xianming thought for a moment and said, "Mr. Yang, the gas industry is already a sunset industry, gradually being replaced by electricity. Hong Kong and China Gas itself doesn't have many properties in Hong Kong. What is your purpose in acquiring this company?"

In the early years, Hong Kong and China Gas was indeed very popular, after all, Hong Kong people needed gas for cooking, and the exclusive monopoly brought huge profits.

However, with economic development and improved economic conditions, coupled with the widespread use of kitchen appliances, people now use electricity for boiling water and cooking. Many people even use induction cookers instead of gas for cooking.
On the one hand, the cost of gas is not much lower than that of electricity, and it also requires frequent replacement and transportation. On the other hand, gas is toxic and poses a risk of being flammable and explosive. There have been many such fires in Hong Kong's history. Therefore, families with sufficient economic means no longer use gas.

This also led to a decline in the business of Hong Kong and China Gas.

Yang Wendong said, "I'm not interested in the properties of China Gas, there aren't many there. What I'm interested in is the gas business."

Actually, I'm not optimistic about gas either. My family doesn't use gas anymore. But you've been abroad; they used to use gas, then they started using electricity, but what about now?

"They're using natural gas now?" Fang Xianming immediately understood: "Mr. Yang, you're optimistic that Hong Kong will also use natural gas in the future, so you want to invest first?" Yang Wendong said: "Yes, natural gas is much safer than coal gas and much cheaper, so once natural gas can be popularized, more people will use natural gas instead of electricity. In that case, it will be a big business."

Hong Kong and China Gas Company Limited (HKG) has a monopoly on gas supply in Hong Kong, so we need to acquire it first, and then invest in supplying natural gas under its name.

The widespread availability of natural gas is self-evident; it was present in major cities across mainland China in my previous life.
In terms of safety, it's much safer than natural gas; at least there's no risk of poisoning, and the probability of explosion is low. Although accidents do occasionally occur, the risk is much lower than with gas. Furthermore, electricity isn't absolutely safe either.
Using energy inevitably carries risks, as long as the probability is low enough.

Fang Xianming said, "I haven't conducted any investigation yet, but judging from the situation in Western countries, this business should be feasible. However, the initial cost of laying pipelines covering the entire network, as well as port facilities for transporting LNG from overseas and gas storage facilities, is very high."

“Which large-scale infrastructure project doesn’t involve a huge initial investment? Our ports and Hung Hom Tunnel were built like that, weren’t they?” Yang Wendong said nonchalantly. “We don’t need to worry about these things too much. Even if natural gas becomes widespread, it will be many years from now. It probably won’t happen in the short term.”
My acquisition of Hong Kong and China Gas also serves another purpose: to potentially participate in some construction and investment projects in mainland China, which is what I'm most optimistic about for the future.

In the future, oil in mainland China will be under state control, but coal gas and natural gas will not be. Private enterprises can participate, including Hong Kong capital. Well-known examples include Hong Kong and China Gas and China Gas Holdings.
These large-scale, monopolistic enterprises may not have the same return on investment as real estate or even some factories, but they are extremely stable and have a strong influence.
Now that the Yang family has developed to its current level, it is not necessary for every business to be highly profitable; what is more important is to have stable industries that last for decades.
The gas supply industry will not decline unless controlled nuclear fusion is discovered in the future.

"Doing business in the mainland?" Fang Xianming thought for a moment and said, "Leaving aside natural gas, the coal gas sector alone would be a huge market. However, would the country allow foreign investment to participate in this kind of business?"

He also understood some of the main purposes of China's reform and opening up. Basically, it was to earn foreign exchange or to save foreign exchange. Therefore, some businesses that could not be done domestically would be brought in by foreign investment.
But China can obviously produce its own coal gas, and even natural gas in the future.

"Nobody knows for sure right now, but even if the domestic market doesn't open up, Hong Kong alone is a pretty good opportunity. Let's acquire it first." Yang Wendong didn't explain further, saying, "The market isn't optimistic about Hong Kong and China Gas right now, which is a good time for us to make our move. I remember we already acquired some shares before, right?"

Many large companies in Hong Kong have had a portion of their shares acquired by Cheung Hing Group. The purpose of this acquisition is to prevent some funds from simply earning interest in banks. Investing in multiple listed companies is the most appropriate approach.

Fang Xianming said, "Yes, it's about 10%, but there's a problem. Li Zhaoji seems to have been bullish on Hong Kong and China Gas for a long time, and he also holds some shares, about 20%."

“Li Zhaoji, that further proves that our investment direction is correct.” Yang Wendong nodded and said, “Don’t worry about him, let’s do our thing. In the next period of time, we will acquire shares of Hong Kong and China Gas in the stock market, and acquire 30% first.”

We cannot privatize such public enterprises; reaching a certain shareholding is sufficient.

“Okay.” Fang Xianming agreed, then added, “Perhaps we can cooperate with Mr. Li. After all, once we’ve acquired 30% of the market share, it will be very difficult to acquire more.”

Yang Wendong nodded and said, "That's fine. You can buy shares in the stock market while also going to Li Zhaoji. If he's willing to sell his shares, that would be best, and I can buy them at a high price."
If he wants to continue holding the shares, then he just needs to support my takeover of Hong Kong and China Gas. Nothing else is required. I'll leave this matter to you.

The market doesn't have a positive outlook on Hong Kong and China Gas, and its market value is now just over 100 million. It's no longer worth Yang Wendong personally getting involved; he can just send his subordinates.

Fang Xianming said, "Okay, I'll ask him to come out right away."

The next day, Fang Xianming visited the headquarters of Li Zhaoji's company directly, and Li Zhaoji naturally gave him a warm welcome.

After exchanging pleasantries, Fang Xianming got down to business, and Li Zhaoji's expression froze upon hearing it.

"What's wrong, Mr. Li?" Fang Xianming asked.

Li Zhaoji sighed, "Mr. Fang, you may not know this, but I was actually planning to acquire Hong Kong and China Gas in a while."

"You also have the idea of ​​acquiring Hong Kong and China Gas? Then why didn't you do it sooner? Shouldn't you have done it all at once?" Fang Xianming retorted.

Li Zhaoji shook his head and said, "In the early days, I was short of funds because I had developed many projects in the real estate sector. In addition, I had already acquired 20% of Hong Kong and China Gas shares, and the market was not optimistic about Hong Kong and China Gas, so I was not in a hurry."
But I never expected that Mr. Yang would also be interested in China Gas.

Fang Xianming laughed and said, "That can only be said that great minds think alike. The market is not optimistic about it, but Mr. Yang and Mr. Li are optimistic about it, which is enough to show that it is seriously underestimated."

"So what does Fang Sheng need me to do now?" Li Zhaoji asked somewhat helplessly.

He had no choice but to give up, after all, it was impossible for him to compete with Yang Wendong in terms of assets; they were not even in the same league.
All I can say is that I hesitated in the early stages;
If he makes the first move, then according to the tacit understanding among Chinese people, Yang Wendong will most likely not try to snatch the food from the tiger's mouth.

Fang Xianming said, "I understand Mr. Li's feelings at this moment, but I can't change Mr. Yang's decision. However, from another perspective, China Gas is a public enterprise and cannot be privatized. Mr. Li can still become its major shareholder."
"If Mr. Yang successfully acquires Hong Kong and China Gas, he will inevitably invest even more resources and may even be preparing to expand into other countries and regions. As a shareholder, your economic returns might be even higher than the acquisition itself."

"Haha, that's all I can think about now." Although Li Zhaoji was somewhat displeased, he realized from another perspective that it was indeed true; even if he acquired the company, he would have little ability to expand overseas.
Fang Xianming said, "In that case, I will gradually acquire stocks on the stock market. When you have 20% and I have 30%, we can join forces to seize power."

“Okay, I’ll definitely cooperate with you,” Li Zhaoji readily agreed.
PS: Please give me a monthly ticket
(End of this chapter)