Return to 1958 and build a century-old giant

Chapter 928 Investing in Orient Overseas
If it's an ordinary person or company looking to buy at rock-bottom prices, then they can simply purchase property directly.
However, Cheung Hing Properties already owns too many properties and land in Hong Kong. If it were to buy more at the bottom, on the one hand, such an overly aggressive move could cause fluctuations in the real estate market. On the other hand, holding too many properties in one city is not a good thing either, as overly concentrated assets are not conducive to financialization.
The most extreme example is Bitcoin in later generations. If an individual has a few, dozens, or hundreds of Bitcoins, it is relatively easy to cash out. However, if someone has hundreds of thousands of Bitcoins, then the so-called value of tens of billions of dollars becomes almost useless, because once they start cashing out, it will affect the entire market.

The real estate sector might not be as extreme, but the principle is similar.

Having reached this point, he no longer intends to over-invest in Hong Kong real estate; he only needs to acquire Hongkong Land in the future.
Controlling numerous other Hong Kong real estate companies through the stock market is a good method. The stock market also makes it easier to cash out and leave, while simultaneously attracting a large number of talents to indirectly profit for oneself.

Fang Xianming smiled and said, "Okay, I understand. Hang Lung, Great Eagle and other groups have encountered trouble. Their previous operations were quite good. After we invest, we can revitalize their companies and help them weather this wave of real estate crisis. Then everything can return to normal."

“Yes, let’s do it that way. Those who were able to start businesses in the past were basically all shrewd people, and they were very good at business management. It’s just that they misjudged the situation in Hong Kong before, which is why they lost money.” Yang Wendong nodded and said.
Historically, many Hong Kong real estate companies and shipping magnates died suddenly due to various misjudgments, ultimately leading to the rise of four major families, including Li Ka-shing.
Fang Xianming continued, "Mr. Yang, besides the real estate company, the Dong family of Orient Overseas has also approached me. The global situation for the shipping industry isn't good right now either. What should we do?"

"The Dong family?" Yang Wendong thought for a moment and said, "When Dong Haoyun passed away, I went to the funeral hall. Now their cash flow is also in trouble?"

Fang Xianming said: "Yes, there is a big problem. A few years ago, when Tung Chao-yung was still alive, he desperately bought ships and purchased European shipping companies. In addition, he also placed many ship orders in Japan and Europe."
The 82-ton displacement "Sea Giant" belonging to Mitsubishi Heavy Industries of Japan, which was purchased by Dong Zhuo from a Greek shipping company, is now also at a standstill.

“Tung Chao-yung could actually see this shipping crisis, but he was too eager to become the world’s number one shipping magnate, and he judged that the shipping market would recover in a short time, so he took a gamble.” Yang Wendong shook his head and said, “It’s the same as what Hang Lung Group and Hongkong Land did in the real estate market.”

Every era has its elites, but to become a giant, one often has to take big gambles. If you win, your assets will double; if you lose, you will go bankrupt.

Tung Chao-yung was Hong Kong's first shipping magnate and was a senior to Pao Yuk-kong in terms of seniority. However, he was defeated by Pao Yuk-kong in the shipping market, which made the proud Tung Chao-yung very upset. He tried every means to surpass Pao Yuk-kong.

By the late 70s, the global shipping market was already oversupplied, with more ships being built than needed, and major shipyards were still building ships. Everyone in the industry could see that a ship disaster was imminent, so Pao Yu-kong sought to abandon ship and go ashore. Historically, he had acquired Wharf Holdings, but now he acquired CLP Power.
Tung Chao-yun is a smart man, and he naturally knew that a crisis was coming, but he believed that it would only be a short-term crisis, so he began to buy up stocks on a large scale.

In many cases, the harm of an economic crisis is not significant, but if the timing and judgment of buying at the bottom are wrong, it can be fatal.

Tung Chao-yung is a prime example. His relentless expansion allowed him to surpass Pao Yu-kang in ship tonnage, but it also resulted in a massive debt. To make matters worse, he suddenly suffered a stroke and passed away last year, leaving the Tung family with a mountain of problems.

If it weren't for the abilities of the second generation of the Dong family, the Dong family might have completely declined.

Zheng Zhijie said, "Yes, Bao Yugang abandoned his ship and went ashore. He did the opposite, borrowing heavily to buy new ships and various second-hand vessels. In addition, the Hong Kong dollar exchange rate was low, and the funds used to buy ships were basically foreign exchange, so the losses were even greater."

This wave of Hong Kong dollar crisis ultimately caused the Hong Kong dollar exchange rate to fall from 5:1 to 7.8:1 against the US dollar. As a result, companies that had borrowed a lot of foreign currency debt suffered heavy losses in Hong Kong dollar terms, because the foreign currency borrowed still needed to be converted into foreign currency when it was time to repay.
Fang Xianming continued, "What's worse is that with so many ships, if there's no business, we have to invest huge sums in maintenance and upkeep, as well as port fees, etc. This is much worse than the real estate market."
Even if the real estate market experiences a crisis and prices plummet, there's still some rental income. However, ships, once caught in a shipping crisis, can see their value plummet to negative territory. Many shipping companies are now sending ships to Southeast Asia for scrapping, some of which are several years old.

"How is the Dong family dealing with the bank now?" Yang Wendong asked.

Fang Xianming said, "Tung Chee-chen has successfully persuaded banks in Japan and Europe to postpone loan repayments for a period of time, which is why they came to us. In Hong Kong now, there are not many conglomerates that have the strength to save them."

"He does have some ability; he was even able to persuade the banking syndicate." Yang Wendong smiled.
These two second-generation members of the Tung family are truly capable. Historically, one became the future leader of Hong Kong, while the other successfully saved the family group from its precarious situation.

Fang Xianming then asked, "Should we help him out? What do you think we should do? Should we invest, or arrange for Hang Seng Bank to lend them some money?"

“There’s still some risk involved. I need sufficient security guarantees before I invest,” Yang Wendong shook his head and said, “What will they do if the shipping market doesn’t perform well?”

Historically, Orient Overseas did manage to survive, but it was a very difficult time, and it only gradually returned to profitability in the 90s.
The premise was that Orient Overseas received investment from Huo Yingdong and the mainland capital behind him, which gave them access to many mainland export markets in the future, allowing them to slowly recover.
If I invest too early, will it affect the course of history? If domestic investment stops, even if the Dong family manages to weather the storm, it's uncertain when things will return to normal. At the very least, the return on investment won't be much.

Fang Xianming said, "Mr. Dong also requests to see you in person to discuss this matter. What do you think?"

"Which Dong Sheng?" Yang Wendong asked in return;

Fang Xianming replied, "It is Dong Jiancheng."

"Okay, let's meet." Yang Wendong nodded in agreement.
Historically, another son of the Tung family was destined to be the future leader of Hong Kong, so no matter what, he still had to be given face;
Although history may change because of my existence, it may not change either. Anyway, it's just a meeting, and there won't be any loss.
As for investment, if the other party can provide certain guarantees, he is happy to invest, which can also be considered a political investment.

Fang Xianming said, "Okay, I'll make the arrangements."

On the third day, in the presidential suite of the Four Seasons Hotel in Hong Kong, Yang Wendong met Dong Jiancheng, along with another acquaintance.
"Mr. Huo, it's been a long time." Yang Wendong shook hands with Huo Yingdong and said, "I heard that Mr. Huo has been investing heavily in sports in mainland China recently and has rarely appeared in Hong Kong."

“Haha, things are a bit sensitive in Hong Kong right now. You know my situation, so I naturally went to the mainland to hide. I also happen to like sports, so I invested some money in it.” Huo Yingdong smiled and said, “I know that Mr. Yang has also spent a lot of money on sports. It seems that we share the same interests.”

"Haha, I only helped a little bit, improving the athletes' living standards. It's not a big help, and it will pay off in the future," Yang Wendong laughed. "It's still not as good as Huo Sheng's."

Huo Yingdong may genuinely love sports, or perhaps he hopes to help the mainland in this field. In the years following the reform and opening up, he invested hundreds of millions of Hong Kong dollars to sponsor the domestic sports cause.
This amount of money may be far less than Yang Wendong's investment, but Yang Wendong's investments are mainly project-based and fall under the category of commercial investment, while Huo Yingdong's is purely sponsorship. Huo Yingdong smiled and said, "Mr. Yang has also invested a lot in the health field, which I admire. Your direction may be what the mainland needs most urgently right now."

“There are so many urgent things to do. There’s no comparison between which one we choose. When it comes to charity, you can do anything,” Yang Wendong said.
Saving lives, environmental protection, education, poverty alleviation, etc., all fall under the category of charity. We cannot neglect investing in education just because saving lives is more urgent. This is a contradiction. Therefore, under normal circumstances, we do not make comparisons. Any type of charity is fine as long as it is done.

“Okay,” Huo Yingdong continued, “Look at me, I almost stole the show today. Mr. Dong, you should speak.”

"Thank you, Mr. Huo." Dong Jiancheng took out some documents from his file bag, handed them over with both hands, and said, "Mr. Yang, these are the latest financial data of our Oriental Overseas, as well as our future development plans. Please take a look."

"Okay, let me take a look first." Yang Wendong took the documents and began to read them carefully, occasionally chatting with Huo Yingdong about daily life.
After a while, he said, "Mr. Dong, I have read through these documents. I can only say that the current situation of Orient Overseas is not good. Although you have a future operation plan, it is based on the premise that the shipping market will recover by 85, but I am not optimistic about that."

Huo Yingdong asked, "Does Mr. Yang think the shipping market won't improve in another two years?"

Yang Wendong shook his head and said, "Yes, the bubble must be squeezed out before it can recover. The shipping market can only recover after it reaches a balance between supply and demand. So either the global market economy will develop rapidly and demand will surge, or a large number of ships will be scrapped. Only after a new balance is formed can it recover."

Tung Chee-hsieh said, "Currently, many old ships around the world are being sent for dismantling. In two years, it is estimated that at least 100 million tons of ships can be dismantled. Isn't that enough?"

Yang Wendong said, "Not necessarily. Later on, many people will wait. It's actually the same as the real estate market. It's all about the cash flow. Only after those shipping companies with insufficient cash flow go bankrupt can things return to normal."

Huo Yingdong said, "What Yang Sheng said makes a lot of sense. I think so too. Although OOCL has a lot of debt, it still has a lot of high-quality shipping routes. As long as it gets some funds, it can wait for the shipping market to recover."

Yang Wendong countered, "Mr. Huo, are you here today as a lobbyist? So, does that mean you're also planning to invest in Orient Overseas?"

Huo Yingdong smiled and said, "Yes, I plan to invest 5000 million US dollars. In addition, a state-owned enterprise in mainland China will also invest 8000 million US dollars. At the same time, we will also reach a certain cooperation with Orient Overseas."

Although the mainland is a bit poor, it is still a superpower, and its annual exports are enormous.

"Now that you have so much capital, do you still need my investment?" Yang Wendong asked.

“The more investment the better, after all, Orient Overseas’s debt is indeed too heavy.” Huo Yingdong continued, “To be honest, neither I nor the mainland have absolute confidence in this investment, but if Mr. Yang gets involved, then it will definitely be a sure thing.”

"Well, how much investment do you need from me?" Yang Wendong asked.

Tung Chee-hsieh said, "I hope Mr. Yang can invest US$1 million, and at the same time, Hang Seng Bank can give my company a loan of US$1.5 million."

“This is no small sum.” Yang Wendong thought for a moment and asked, “How many shares will I get?”

Dong Jiancheng said, "20%."

"Can Orient Overseas still be valued at $4 million?" Yang Wendong asked rhetorically.
Huo Yingdong said, "Mr. Yang, the current valuation of Orient Overseas is naturally not that high, but investment itself is a bet on the future. Once the shipping market recovers, the asset value of Orient Overseas will also rebound exponentially. In addition, with so many shipping routes, its value is also considerable."

“I can consider investing, but 20% is too little. Talking about future value is meaningless. Just like the current real estate market, it is what it is.”

Yang Wendong shook his head and said, "How about this, if you want my investment and bank loans, then you have to let my people do an in-depth investigation first, and then re-evaluate the loan, including the interest rate, which will also be determined based on the risk, and collateral will also be required."

From a business perspective, he can't ignore current risks just because he knows the future; that would be foolish.

Furthermore, my existence could potentially impact the former Tung Chao-yung, the shipping market, and the global economy, making this investment genuinely somewhat risky.

If it weren't for the Dong family's future political value, he would never have considered investing in this project. After all, investing in real estate in China or Japan these days is far better than investing in this.

After exchanging a glance with Huo Yingdong, Dong Jiancheng said, "Okay, Mr. Yang, I already have the relevant information. You can send someone over to investigate at any time."

During this period, he went to countless banks to borrow money again, and naturally prepared all kinds of documents.

“Okay, I’ll arrange for someone to go there tomorrow,” Yang Wendong nodded.

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(End of this chapter)