In Hong Kong, we build a global business empire

Central, Chinatown Building, headquarters of Cheung Kong Holdings.

Li Ka-shing sat in his spacious office, looking at the newspaper article about Kowloon Wharf's acquisition of Wheelock & Co., with a complex expression on his face.

There was a hint of surprise, a hint of jealousy, but mostly envy and regret.

Once upon a time, Li Ka-shing was one of the top Chinese businessmen in Hong Kong. He swallowed Hutchison Whampoa like a snake swallowing an elephant, becoming the first Chinese taipan of Hutchison Whampoa.

At that time, he was full of vigor and ambition.

Newspapers called him "the pride of Chinese businessmen," and his peers would respectfully address him as "Superman Li."

He thought he had reached the pinnacle of Hong Kong's business world and that the era of British capital would come to a complete end in his hands.

Perhaps it was because he was in a high position, or perhaps he believed that Lin Haoran was the biggest obstacle to his ascent to the top of Hong Kong's business world. Coupled with direct conflicts in their respective businesses and the deep ties between their interests and Huifeng Bank, he and Lin Haoran were naturally opposed.

Therefore, he spearheaded the formation of the "Anti-Lin Alliance," attempting to unite several major British financial groups, including the Kadoorie family, Jardine Matheson, and Standard Chartered Bank, to jointly confront Lin Haoran, a rapidly rising Chinese business tycoon.

At that time, he was full of confidence, believing that in addition to Cheung Kong Holdings, he also held the trump card of Hutchison Whampoa and had the support of British conglomerates. No matter how powerful Lin Haoran was, he could not escape his grasp.

But the result?

The Kadoorie family's Peninsula Hotel was robbed, forcing them to back down midway.

Brown, the former head of Standard Chartered Bank's Hong Kong branch, was dismissed, and the UK headquarters was the first to concede defeat to Lin Haoran.

Jardine Matheson was too busy to take care of itself, and those British conglomerates were all running away faster than the last.

He was the worst off.

After finally signing a deep-bond agreement with Huifeng Bank and successfully taking control of Hutchison Whampoa, Lin Haoran forcefully seized control of Hutchison Whampoa before he had even been the taipan of the company for a year.

Most importantly, the other party almost swallowed up Cheung Kong Holdings as well, holding a 38.4% stake, just one step away from his 40% stake.

During that time, he couldn't sleep at night, fearing that Lin Haoran would suddenly make a move and take over Cheung Kong Holdings, which he had founded.

Ultimately, he compromised, agreeing to completely relinquish Hutchison Whampoa in exchange for Lin Haoran ceasing further acquisitions of Cheung Kong Holdings.

Since then, although Li Ka-shing was still the chairman of Cheung Kong Holdings, a pivotal figure in Hong Kong's business world, and one of the "Five Tigers" of real estate, he knew in his heart that a huge mountain was always weighing on his head.

This mountain is called Lin Haoran.

Although Lin Haoran did not take any further steps, the 38.4% stake was like a sword hanging over his head, constantly reminding him that he was no longer the sole owner of Cheung Kong Holdings.

In other words, his meticulously planned "anti-Lin alliance" ultimately ended in his own crushing defeat.

Not only did he fail to shake Lin Haoran in the slightest, but he also got himself into trouble. Hutchison Whampoa was gone, and Cheung Kong Holdings was no longer his alone.

That business battle completely shattered the sharp edge he had accumulated over the years.

He no longer possesses the same high spirits he had when he acquired Hutchison Whampoa.

He became cautious, conservative, and hesitant to make any moves easily.

He had to weigh every decision carefully, fearing that if he made a wrong move, he would lose even the last bit of Cheung Kong Holdings.

He was once a "superman" in Hong Kong's business world, but now he is just a man who maintains the status quo.

Now, he can only sit in this office, looking at the news in the newspaper, as an observer, watching with envy as his old friend Bao Yugang makes his mark in the business world, and as Lin Haoran acquires one British-owned trading company after another.

Li Jiacheng could only watch helplessly, unable to do anything about it.

Back then, Bao Yugang, out of consideration for their long-standing friendship, was willing to mediate the conflict between him and Lin Haoran.

But he ignored Bao Yugang's advice and insisted on fighting Lin Haoran to the end.

Looking back now, every word Bao Yugang said back then was a golden rule.

"Lin Haoran's rise is an unprecedented change in the century since Hong Kong opened as a port! Jardine Matheson, HSBC, Standard Chartered Bank... which of these British conglomerates that once rode on the backs of the Chinese has not stumbled at Lin Haoran's hands?"

"His dragon has already taken flight, overlooking the entire Hong Kong! There is no way out by going against him!"

Those words, spoken at the time, seem like gems of wisdom now.

Unfortunately, he was blinded by ambition and wouldn't listen to a word.

Looking back now, Bao Yugang advised him not because he was afraid of Lin Haoran, but because he genuinely cared for him and was considering their long-standing friendship.

Bao Yugang had a close relationship with Lin Haoran and knew the young man's methods and vision best.

No one who opposes him ever comes to a good end.

Those who partnered with him, however, all made a fortune.

If he had listened to Bao Yugang and taken the initiative to reconcile with Lin Haoran, or even just remained neutral, he wouldn't be in this situation today.

Hutchison Whampoa will not be lost, and Cheung Kong Holdings will not be largely taken away.

He is still the "Superman Li" standing at the top of Hong Kong's business world, still the business tycoon who can command the wind and rain.

But what's the point of saying all this now?
Li Jiacheng turned the newspaper over, no longer wanting to read it.

But those words seemed etched into my mind, impossible to erase.

"Wharf Holdings takes over Wheelock", "The era of British capital ends", "Two Chinese business giants join forces to rewrite the landscape of Hong Kong's business world"...

He stood up and walked to the window.

Outside the window, the skyscrapers of Central stand side by side, and the surface of Victoria Harbour glistens.

The most eye-catching thing is the building under construction not far away, which is already over 300 meters tall. It is said that it will become the tallest building in the world when it is completed.

That building belongs to Lin Haoran!
Li Jiacheng spent most of his life working hard in Hong Kong, building countless buildings and undertaking numerous projects, but none of them could become a landmark of the city or a symbol of this era like that building.

He suddenly remembered what his father had told him when he was in Chaoshan before he came to Hong Kong: "Jiacheng, one should be content with what one has."

Contentment?

Li Jiacheng has never been a content person.

He knew from a young age that if he wanted to get ahead, he had to work harder, be smarter, and be more ruthless than others.

He rose from a poor boy to where he is today by never being satisfied.

But now, he has to admit that there are some people he can't catch up with.

Lin Haoran is younger, richer, and more ambitious than him.

Moreover, Lin Haoran has an advantage that he can never match: timing.

Lin Haoran was fortunate to live in the best of times, a time when British capital was at its weakest and Chinese capital was at its strongest.

Li Jiacheng, though he caught up, was no match for Lin Haoran.

He couldn't help but recall Zhou Yu's famous lament from the Three Kingdoms period: "Since Heaven gave birth to Yu, why did it also give birth to Liang!"

If Lin Haoran had not appeared in Hong Kong's business world, perhaps Li Jiacheng would have been the true protagonist of this era.

Hutchison Whampoa will be his, HSBC will not fall into the hands of others, and at least half of the four major foreign trading companies will be under the Li family name.

He will undoubtedly be the number one person in Hong Kong's business world, the best of the best among Chinese businessmen, and the most outstanding among outstanding individuals.

He might even become the richest Chinese person in the world!
Unfortunately, Lin Haoran arrived.

This young man seemed to spring from a crack in the rock, appearing out of nowhere with unstoppable momentum.

With a vision and boldness that seemed out of step with his time, he had already taken control of half of Hong Kong before anyone could even react.

By the time Li Jiacheng came to his senses, it was too late.

If Lin Haoran knew what Li Jiacheng was thinking at this moment, he would definitely find it funny.

What vision and boldness does he possess that are out of step with the times?

He simply knew more about the course of history by several decades than others, and foresaw in advance which pitfalls to avoid and which paths to take.

If he had to name any talent, it would be that he understood better than anyone else that in the face of the tides of the times, the power of an individual is insignificant.

Going with the flow is much easier than going against the current.

Li Jiacheng didn't understand this principle, or rather, he understood it but couldn't bring himself to lower himself to it.

He desperately wanted to be the "number one," and he wanted to claim all the glory for himself.

That's why he was so complacent after acquiring Hutchison Whampoa, thinking he had reached the pinnacle.

But he forgot that above the peak, there are even higher mountains.

Li Jiacheng sighed, turned around, walked back to his desk, and sat down.

At this moment, the secretary knocked on the door and came in, saying respectfully, "Mr. Li, all the directors have arrived in the conference room. The meeting will begin in 5 minutes, and we are waiting for your arrival."

Li Jiacheng nodded, stood up, and straightened his suit and tie.

Looking at myself in the mirror, my hair is mostly gray, and the wrinkles around my eyes are much deeper than they were a few years ago.

He recalled the triumphant look on his face in front of the mirror when he acquired Hutchison Whampoa two years ago, and it felt like a lifetime ago.

"Let's go." He took a deep breath and pushed open the door.

The corridor was carpeted thickly, completely silencing any footsteps. In the conference room, the board members were already present.

Li Jiacheng walked to the front of the stage and sat down, his gaze sweeping over everyone present.

There were his old subordinates who had followed him for decades, directors who had joined in recent years, and a young man sitting in the corner, who was a representative sent by Lin Haoran.

The young man looked very young, probably in his early thirties, wearing a well-tailored dark blue suit, with a polite and appropriate smile on his face.

When he saw Li Jiacheng's gaze sweep over him, he bowed slightly as a greeting.

Li Jiacheng's heart sank slightly.

Every time he sees this representative, he is reminded that he is no longer the owner of Hutchison Whampoa, nor the sole owner of Cheung Kong Holdings.

This feeling is like having a thin thread around your throat—not fatal, but a constant reminder that your life is not in your own hands.

"Let's begin." Li Jiacheng withdrew his gaze and opened the documents in front of him.

The sales director was the first to stand up and walk to the projection screen, his hand holding the remote control trembling slightly.

"Distinguished directors, this is a summary of the sales performance of all properties in our Cheung Kong Holdings since the outbreak of the real estate crisis on September 24."

He pressed a button on the remote control, and a string of red numbers appeared on the screen.

"As of yesterday, the cumulative sales of the group's thirteen ongoing projects this month..."

He paused for a moment, then lowered his voice: "12 sets."

The meeting room was completely silent.

Some people looked down at their desks, some pretended to flip through documents, but no one dared to look up at Li Jiacheng's face.

Everyone knows what this means: it means that among the 13 properties currently on sale, the average number of units sold per property since the real estate crisis began is less than one!
Keep in mind, it's already October 20th.

The Hong Kong property crisis broke out on September 24, almost a month ago.

Over such a long period of time, the entire group's new housing developments only sold 12 units—a number that would make any real estate developer's heart pound.

The sales director wiped the sweat from his brow and forced himself to continue: "Moreover, of these 12 units sold, 9 were sold at a price reduction of more than 20%."

The remaining three units were for customers who had already paid deposits. We were forced to offer additional discounts to complete the transactions, resulting in the actual amount received being nearly 3% less than the budget.

The entire conference room was completely silent.

Everyone knows what this means: it means that Cheung Kong Holdings is currently facing pressure to recover funds.

A real estate giant with a market value of several billion yuan sold only 12 houses in nearly a month, which would have been unthinkable in the past.

But now, it has actually happened, like a resounding slap in the face to every senior executive and director of Cheung Kong Holdings.

The sales director continued, "This is not just a problem for us alone; it's a problem for the whole of Hong Kong. Since the real estate crisis broke out, confidence in the entire market has collapsed."

Those speculators have already fled, and those with genuine housing needs are also watching and waiting, afraid that if they buy today, the price will drop tomorrow. We have already started to lower prices and promote sales, and the prices of some properties have been reduced by 15% to 20%. But the more we lower prices, the more customers feel that prices will drop even further.

The current situation is that no matter how much we lower our prices, no one dares to intervene.

He pressed a button on the remote control, and another set of data popped up on the screen: "This is the inventory situation of each property. Currently, the group has more than 42,800 residential units under construction or awaiting sale."

Especially for properties under construction, we need huge amounts of capital investment every day. If sales revenue doesn't keep up, these projects will soon become the last straw that breaks the group's back.

Forty-two thousand eight hundred residential units.

When Li Jiacheng heard this number, his heart sank.

The land acquired and projects launched by Cheung Kong Holdings at its peak have now all become heavy burdens.

Every day, the wages of the construction workers, the cost of materials, and the equipment rental fees alone amount to an astronomical sum.

However, after these houses were built, they could not be sold at all.

The operations director then stood up and said, "There's one more thing. Several contractors from our projects have come to urge us for payment. They say that due to market pressure, if they don't receive payment this month, they will have to stop work."

The largest of these projects is our Grandview Hill project in Tseung Kwan O, with a total construction area of ​​over 1.3 million square feet. If construction stops, not only will all our initial investment be wasted, but we will also face huge breach of contract penalties.

Li Jiacheng's brows were almost furrowed into a deep frown.

The Grand Villa in Tseung Kwan O was one of his key projects that he took over from Hongkong Land Group at the beginning of last year, and the land alone cost nearly HK$5 million.

At that time, he felt he had gotten a great deal and thought that once the project was completed, he would earn at least three times the profit.

But now, this project has become a huge burden for Cheung Kong Holdings.

This project is just one of many projects currently under construction by Cheung Kong Holdings.

Cheung Kong Holdings has always been one of the Hong Kong business giants with particularly large cash flows, which is why it has stood firm through multiple real estate crises.

However, in recent years, Cheung Kong Holdings has already depleted a large amount of its cash reserves in order to acquire Hutchison Whampoa.

Previously, during the price war with Lin Haoran's group, they suffered a significant loss of cash flow.

Furthermore, Lin Haoran suddenly appeared out of nowhere, not only seizing control of Hutchison Whampoa, but also almost swallowing up Cheung Kong Holdings.

Although the two sides eventually reached a compromise, the business battle severely damaged Cheung Kong Holdings, almost draining its cash reserves.

Today, Cheung Kong Holdings' cash reserves have fallen to a historic low.

The real estate crisis came quickly and fiercely, giving no one a chance to catch their breath.

He had considered scaling back operations, selling assets, and raising funds in advance, but he always felt that the real estate market wouldn't fall too drastically and that the crisis would pass quickly.

This wishful thinking caused him to miss the best opportunities time and time again.

By the time he realized what was happening, it was too late.

With Li Ka-shing's foresight, he naturally predicted early on that Hong Kong would sooner or later experience a real estate crisis due to political reasons.

He just didn't expect it to come so quickly.

In the past, when Cheung Kong Holdings had ample cash reserves, the so-called real estate crisis was not a disaster for Cheung Kong Holdings, but rather an opportunity for expansion.

Every crisis presents Li Ka-shing with a good opportunity to buy at rock-bottom prices.

He can be greedy when others are fearful and buy when others are selling off, all thanks to Cheung Kong Holdings' strong cash reserves.

But now, the cash is gone.

He not only lacked the capital to buy at rock-bottom prices, but he was also nearly frozen to death by this winter.

The houses couldn't be sold, the contractor came to collect payment, and the bondholders demanded redemption.

Li Jiacheng, once a "superman" at the top of Hong Kong's business world, can't even come up with a few hundred million now.

Besides the Grandview Hillhouse, Cheung Kong Holdings has more than a dozen projects under construction in the New Territories, Kowloon, and Hong Kong Island. Each of these projects involved land acquired at a high price and requires continuous investment.

These projects are like a group of hungry children, waiting for him to feed them.

But now, this father is almost starving.

"Mr. Li?" The CFO's voice brought him back to reality.

Li Jiacheng turned his gaze to the financial director.

The CFO continued, "Currently, our Cheung Kong's debt ratio has reached 63%, far exceeding our previously set warning line. We've received feedback from Huifeng Bank and Hengsheng Bank that if our debt ratio remains high, even with Lin Sheng's connections, it will be difficult for them to continue lending to us."

"Mr. Li, the bank's attitude is very clear: if we cannot improve our financial situation in the short term, they will not only not renew the loan, but may also withdraw it prematurely."

These words caused an uproar in the room.

It's worth noting that Cheung Kong Holdings' debt ratio used to be far below the industry standard, at most around 20%. Now, that figure has climbed to 63%, almost three times what it used to be.

This not only means that Cheung Kong Holdings' financial situation has deteriorated to a dangerous level, but also that the confidence of banks and capital markets in it has plummeted.

No one expected that Cheung Kong Holdings would one day fall to such a state.

In Hong Kong's real estate industry in the 80s, a real estate company with a debt ratio far exceeding the industry average of 35%-40% was considered to have a high debt ratio and faced a high risk of bankruptcy.

However, Cheung Kong's debt ratio is now clearly far beyond this range.

63%—this number weighs like a mountain on everyone's mind.

Li Jiacheng remained silent.

He recalled that a few years ago, Cheung Kong Holdings' debt ratio was less than 20%, making it one of the most financially sound companies in Hong Kong's real estate industry.

Back then, banks were chasing after him for loans, investors were scrambling to buy his bonds, and he was revered wherever he went.

But now?

With its debt ratio soaring to 63%, banks are avoiding it like the plague, and investors are fleeing it. Cheung Kong Holdings, which he was so proud of, is now on the verge of life and death.

“Mr. Li,” the CFO’s voice was even lower, “if there’s no injection of funds this month, we might not even be able to pay next month’s salaries.”

These words exploded like a bomb in the conference room.

The directors' faces turned pale instantly. Some began to whisper among themselves, while others secretly glanced at Li Jiacheng with indescribable emotions in their eyes.

Li Jiacheng's gaze involuntarily fell upon the young man sitting in the corner; he was Lin Haoran's representative. (End of Chapter)