Return to 1958 and build a century-old giant

Chapter 886 Landmines: Getting Started

Many future electronic component companies in the past had low brand recognition because their products did not directly reach the consumer market, but their strength should not be underestimated.

Therefore, investing in them has two advantages: firstly, it provides economic returns; secondly, it allows these companies to develop rapidly after acquiring foreign exchange, which can then supply Honor Electronics in the future and create a new industrial chain.

Moreover, these companies are now quite large and located in the central part of various cities, so their future returns in real estate will be extremely considerable.

Next, the group discussed the matter further.
Currently, Changxing Group does not have much business in China. We will not discuss its investment in the automotive industry today, as the core business is in the UK. So, when there is an opportunity in the future, we will have someone from the UK come to Hong Kong to report to him.

In addition to these real businesses, there is also investment in hotels. The Four Seasons Hotel is currently in negotiations with several cities including Beijing, Shanghai, and Guangzhou, and no agreement has been reached yet. This investment is also huge and quite challenging for the local governments, and it cannot be finalized in a short time.

Yang Wendong is not in a hurry. As long as the project can start within the next year, that's fine. The more foreign exchange is needed in the mainland, the better. Using more land as equity investment is also acceptable.

With the meeting over, the internal matters of the company were mostly settled.

Meanwhile, the Hong Kong government has recently released several plots of land, seemingly more frequently than usual. It's unclear whether this is due to Yang Wendong's efforts.

Time flew by and it was early April. Yang Wendong called Zheng Zhijie over and asked, "That 13,000-square-foot plot of land on Cotton Tree Drive will be auctioned off in three days, right?"

“Yes, Mr. Yang, I also needed to confirm this with you.” Zheng Zhijie replied, “We initially agreed to acquire this land, but later it was decided that Jardine Matheson would acquire more land and increase its debt. What should we do if Jardine Matheson also tries to acquire this land?”

Yang Wendong thought about it carefully and said, "How about this, if Hongkong Land doesn't participate in the end, then we'll take it; if Hongkong Land does participate, then let's raise the price and let them take it at a higher price."

The land on Cotton Road is not bad, but in order to trap Landsea, he also plans to use the land of the future Exchange Building as a trap.
If this plan succeeds, then during the worst of the 84 real estate crisis, Hongkong Land will be severely damaged, if not destroyed. If the plan goes smoothly, I can take over Hongkong Land.
Of course, if Hongkong Land survives, it has one last trick up its sleeve. In the past, after the future of Hong Kong was determined, Jardine Matheson planned to sell Hongkong Land in 87. At that time, conglomerates such as Li Ka-shing and Lee Shau-kee were prepared to jointly acquire it. However, due to the stock market crisis in 87, the project ultimately failed, which became the only time in Chinese history that the opportunity to acquire Hongkong Land was missed.

If all else fails, I can wait until then, but the asking price from Hongkong Land will definitely be much higher than in 84; but overall, compared to Hongkong Land prices in ten or twenty years, it's nothing.

Zheng Zhijie agreed, "Okay, will you participate in this auction?"

"I won't participate. You go ahead and report to me about this as soon as possible. I'll probably be in my office," Yang Wendong said, waving his hand.
The land on Cotton Tree Drive was the highest-priced plot of land per unit area before the 83 property crisis, but its area was too small, so the total price was only a few hundred million Hong Kong dollars; in fact, the reason it became the highest-priced plot of land per unit area was precisely because it was small enough. Anyone who has bought a house knows that in the same location, the smaller the house, the higher the unit area.

He usually doesn't participate in auctions of this size.

Zheng Zhijie agreed, "Okay, I'll go prepare now."

A few days later, at the auction, Zheng Zhijie and Hongkong Land indeed clashed head-on, bidding against each other.

Ultimately, at Yang Wendong's suggestion, Zheng Zhijie abandoned his final bid, and Hongkong Land acquired the land for HK$4.8 million, at a price of HK$3.5 per square foot. This price is comparable to that of top city centers in Europe and America.

After the auction, just as Zheng Zhijie was about to leave, Bao Fuda, the taipan of Hongkong Land, approached him and said with a smile, "Mr. Zheng, may we talk alone?"

"Okay." Zheng Zhijie agreed without much thought. They were all top-notch employees, and regardless of their affiliation, they still had to give each other face.

A while later, the two appeared in a coffee shop inside the same building where the auction was being held. After the waiter served the coffee, Bao Fuda asked curiously, "Mr. Zheng, why did your side give up the bidding at the end? A mere four or five hundred million Hong Kong dollars is nothing to Changxing Real Estate, is it?"

Zheng Zhijie said, "It's really nothing, but we had a maximum price in mind before we came. If it was exceeded, we would naturally give up. I think your company should have a similar mechanism, right?"

“Of course.” After taking a sip of coffee, Bobby asked, “Chang Hing Properties Group has been selling off properties recently. Is it because they are not optimistic about the future of Hong Kong’s property market? I wonder if this is your idea or Mr. Yang’s?”

Zheng Zhijie frowned and said with displeasure, "Mr. Bao Fuda, do you think I can answer this question?"

"Haha, sorry, my mistake." But Bobby didn't seem to care much and said, "I, Hongkong Land, am still optimistic about the future of the real estate market. Your company is selling properties, while we intend to increase our holdings. How about we cooperate?"

Zheng Zhijie immediately became interested and asked, "How do we cooperate?"

Previously, there were discussions with Yang Wendong to increase the debt held by Hongkong Land, which could trigger a debt crisis in the future, just like Hutchison Whampoa did in the past.
However, how to sell the properties in hand to Hongkong Land is a problem. After all, Changxing Real Estate can only release information that it wants to sell properties. It is impossible for it to take the initiative to approach Hongkong Land, as that would seem unusual.

Unexpectedly, the other party has now taken the bait.

Boveda replied, “It’s very simple. Don’t announce the properties you want to sell on the market. Your company is quite large, and such news will only affect market prices.”

Why not just tell us directly about Landsea, then we can negotiate the price together, and once we've agreed on it, we can close the deal immediately.

"That's a good method after all." Zheng Zhijie nodded, secretly delighted.

"There's one more thing," Paul said. "It seems that you're only selling properties in Kowloon Peninsula. Would you consider properties on Hong Kong Island?"

"You want a property on Hong Kong Island?" Zheng Zhijie hesitated for a moment before saying, "Properties in Central are probably out of the question, but other places are negotiable. If the price is right, it's not impossible."

According to Yang Wendong, only those irreplaceable properties will never be sold, which are basically landmark buildings in Central or other places.

Properties outside Central on Hong Kong Island are indeed valuable, but with enough money, one can buy similar properties or land in other comparable areas to build more properties. Cheung Hing Group even has the capacity to build another bustling commercial center. Central is the only exception; there's no way around it. The reason they didn't bid for Cotton Tree Drive this time is because it wasn't theirs to begin with; otherwise, the boss probably wouldn't have given up.

Bobby thought for a moment and said, "Alright, how about this, I'll send a team to your company tomorrow to discuss the details, what do you think?"

Although they were just employees, they were top-tier employees, so after discussing the general outline, the details were naturally handled by their business and legal professionals, who would then report back to them.

“OK,” Zheng Zhijie replied.

But there's another point: our transaction may involve a lot of properties, and they're quite expensive. Is it possible to pay in installments?

"Installment payment?" Zheng Zhijie shook his head and said, "You should find a bank to cooperate with. I don't accept installment transactions unless you can settle the payment within three months, then we can consider it."

Installment payments are also common in large transactions;
But Zheng Zhijie disagreed. He argued that the properties he owned were high-quality assets and he wasn't worried about selling them. Besides, they were a legitimate real estate company and didn't engage in such transactions.

“That would have a significant impact on our cooperation,” Baufuda said, frowning.

Large companies often like to delay payments because those delayed payments represent cash flow. For a company, a heavy debt burden is acceptable, but if cash flow dries up, it will collapse immediately.

Zheng Zhijie then said, "How about this, I can arrange for Hang Seng Bank and Standard Chartered Bank to participate in our cooperation, and you can cooperate with these two banks."
As you know, our Changxing Group and Hang Seng have a common shareholder relationship, so we cannot cooperate. However, if Jardine Matheson purchases our properties and then obtains a loan from Hang Seng Bank, there will be no legal issues.”

Hang Seng Bank is a financial institution within the Cheung Hing Group, but on the surface, due to Hong Kong law and the fact that they share the same major shareholder, Yang Wendong, they cannot directly cooperate.

After thinking for a moment, Bobby said, "Okay, then I'll go back and discuss it with Mr. Newbigen."

Newbikin is the taipan of Jardine Matheson Group, and the actual person in charge of Jardine Estate is the taipan of Jardine Matheson Group. Although Hongkong Land Group is larger than Jardine Matheson, it is controlled by Jardine Matheson.

Zheng Zhijie nodded and said, "Okay, I'll wait for your good news."

After the meeting with Paul Baufuda, Zheng Zhijie immediately returned to the Kang Le Building and informed Yang Wendong of the matter.

After listening, Yang Wendong said, "Very good. Since Landsea has taken the initiative to cooperate with us, then we should open our arms and feed them."

“Actually, it’s normal. There aren’t many companies in Hong Kong that can afford to buy our properties, and Hongkong Land is one of them,” said Zheng Zhijie. “Newbikini and Bobby are both optimistic about Hong Kong’s future real estate market, so it’s reasonable for them to directly seek cooperation with us for the sake of maximizing their profits.”

Yang Wendong nodded and said, "Okay, then let's cooperate with him more. Also, let He Sheng know that we can cooperate with Zhidi."

“No problem. I actually discussed this with him before. With his intelligence, he should be able to figure it out.” Zheng Zhijie paused and said, “Mr. Yang, there’s another matter. Mr. He is also quite old. When we discussed this before, he subtly asked me how you plan to arrange Hang Seng Bank in the future.”

“This matter does need to be addressed. Here’s what we’ll do: I’ll go to Hang Seng Bank tomorrow. It’s best if Mr. He doesn’t wander around.” Yang Wendong thought for a moment and said, “You can arrange to negotiate with the Landmark team tomorrow. As long as it’s not a property in Central, we can consider it.”

He Shanheng is almost 80 years old this year, but he is still in good health and has never had any problems, so Yang Wendong has not interfered.
But he's 80 years old no matter what. He probably looks fine, but he himself is probably aware of that, so he wants to make arrangements for the future of the Ho family. After all, at this age, even if he is healthy, he might suddenly not wake up in the morning one day.
Of course, for older people, this way of walking is also a blessing.

The next day, Zheng Zhijie personally led his team to meet with the team led by Bao Fuda at the Kang Le Building. Yang Wendong also gave him face, greeting him for more than ten minutes before leaving to go to Hang Seng Bank.

Hang Seng Bank's headquarters are also in Central, not far away;
Several descendants of the He family greeted Yang Wendong at the entrance of the building and led him to the top floor, to He Shanheng's office.
"Mr. He, it's been a long time," Yang Wendong said with a smile, shaking hands with him.

He Shanheng also reached out his hand, but it was obvious that he was a little slow: "Yang Sheng, it's been a long time. You are still so young. You look about the same as you did ten years ago."

"Haha, you flatter me," Yang Wendong said with a smile, and then the two sat down.

He Shanheng seemed to have passed the age of business pleasantries and said directly, "Mr. Yang, I've called you here today to discuss something with you. I'm getting too old, so I'm preparing to retire. I hope that my descendants will continue to work at Hang Seng Bank."

"You mean you want your son, He Zidong, to manage the bank?" Yang Wendong asked.

He Shanheng smiled and said, "No, it's just that I hope he can stay in his current position as vice president. As long as he does not cause any problems at work, I hope Mr. Yang will continue to employ him."

"That's fine, Xiao He is indeed quite capable." Yang Wendong thought for a moment and then agreed.

His original plan was to take back the management of Hang Seng Bank after Ho Sin Heng retired. He would not agree to let Ho family descendants continue to manage the company, but he would not mind giving them a vice president position. Ho Tze Tung, as the second-generation successor of the Ho family, had been carefully cultivated by Ho Sin Heng since childhood and was considered capable.

Besides, the Ho family is one of the major shareholders of Hang Seng Bank. It's normal for such shareholders to want a senior position, unless they really fall out with the person in power, in which case it might just be a nominal position.

He Shanheng smiled and said, "Alright, then Mr. Yang, find a suitable person as soon as possible. After the handover is completed within three months, I plan to retire completely."

"Okay," Yang Wendong nodded in agreement.

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