Hong Kong 1980: The Savage Era

Chapter 187 [Dongchang Building]

Luo Qihong had done his homework before he dared to meet Ding Xiongzhao. He laughed and said, "I have learned a little about the situation of Kaida Baoye Company. It has several offices in Europe and the United States, but this scale is far from enough. I am very optimistic about the toys under Kaida Baoye Company."

"Once we open up the markets in Europe, America, Japan, and South Korea, the revenue from our products will probably increase several times. Does Mr. Ding really want to reject such a good opportunity for expansion?"

Ding Xiong had looked at Luo Qihong's information and knew that Luo Qihong's industries involved trade, real estate, gas, and securities investment. This was the height achieved in two years. If given some time, it might become a towering tree.

If Kaida Baoye Company can establish a relationship with such an upstart, it will be a good investment. Moreover, the current Hexiang Trading Company can make up for the shortcomings of Kaida Baoye Company in sales and open up the market for the company. This is a win-win situation.

"Then Luo Sheng, please tell me your plan first. If it is suitable, we can cooperate."

Seeing that Ding Xiongzhao had given in, Luo Qihong said, "Hexiang Trading Company will purchase the goods at the factory price, and will not sell them in cities where Kaida Baoye Company has offices. We can also help Kaida Baoye Company open up the markets in Australia and Southeast Asia. We can split the profits from these two markets equally."

Ding Xiongzhao knew this was a good plan, but he still wanted more. "The market profits in Australia and Southeast Asia will be split 7% to 3%, with Kaida Baoye taking 7%."

Luo Qihong smiled and said, "Okay, 7:3, the investment ratio should be the same as this."

"The investment ratio is 6% to 4%, with Kaida Baoye Company contributing 4%." Ding Xiongzhao further probed, his eyes fixed on Luo Qihong.

Luo Qihong shook his head and smiled, "That's impossible! Mr. Ding should know that only Hexiang Trading Company will agree to such conditions. Other trading companies will definitely not agree. Therefore, your company must at least contribute 6% of the capital, otherwise there is no need to discuss it."

Ding Xiongzhao was also an old fox. He felt that Luo Qihong was trying to scare him. "Maybe not, Mr. Luo. Other companies may also be optimistic about Kaida Baoye Company."

"Ha! If you are optimistic about Kaeda Baoye Company, your company would not be just a small or medium-sized toy company in Hong Kong today. It would have been one of the few toy listed companies in Hong Kong." Luo Qihong laughed, his tone inevitably sarcastic.

The reason is that Ding Xiongzhao is getting more and more demanding. Luo Qihong has already given him the best conditions, but this guy is still not satisfied and wants more benefits. He is a bit shameless.

The Cabbage Patch Dolls were not yet famous, and no one could predict the toy's popularity like he did, so he was sure that no trading company would dare to agree to such conditions.

Seeing that Ding Xiongzhao was still thinking, Luo Qihong decided to retreat and said, "Mr. Ding, you should think about it first, or compare it with other trading companies. If you think that Hexiang Trading Company has the best conditions and decide to cooperate with Hexiang Trading, then call me."

Ding Xiong glanced at Luo Qihong and felt that there was no need to make a decision so hastily. It would be better to compare them first.

As a result, the negotiation ended on a sour note.

Back to Zhaoan Real Estate Company.

Cheng Jianshen hurried over to report his work and told Luo Qihong an important event.

"The Hong Kong government has decided to put the 14.4 square feet of land at the Central Bus Terminus up for bid, with a reserve price of HK$30 billion."

Hearing this, Luo Qihong was stunned. At its peak last year, this piece of land was worth more than 70 billion yuan, but now the price is less than half of that. This is really a half-sale and half-giveaway.

However, when I think about the fact that the previous Hong Kong Land Development won the bid for the Central Bus Terminal project with HK$47.55 billion, it seems not so cheap.

"It seems that the real estate market is really in bad shape nowadays. Some time ago, the auction price of land in Admiralty exceeded 2 yuan per square foot. So this piece of land should be worth at least 6 billion yuan." Luo Qihong said with a wry smile.

In fact, the bus terminal land is located in the core area of ​​Central, which is not comparable to the Admiralty area. 2.6 yuan per square foot is a low price, and even 3 yuan per square foot is a profit.

The Hong Kong government is not a charity. The land prices in Hong Kong are so high, and at least half of the credit goes to the Hong Kong government.

"Since the signal for land adjustment was sent out last year, the situation in cities and counties has not been as good as in the first half of last year, but it is not completely bad. There is still some hope." Cheng Jianshen expressed his views.

"When does the bidding start?" Luo Qihong nodded in agreement.

Having hope is the cruelest thing, which constantly tortures these real estate developers. Some want to buy at the bottom, some want to withdraw from retirement or change careers, or wait for opportunities.

"It's mid-April, and the Hong Kong government has not given a clear time yet," Cheng Jianshen replied.

Luo Qihong smiled and said, "It's the same trick again. Without giving a clear time, it's obvious that they want to test the market and pull the local market."

Cheng Jianshen said, "The Hong Kong government has always done things this way, and our colleagues are used to it. In addition, the Central Bus Terminal site is not something that ordinary companies can bid for. Only a handful of companies can participate."

The amount involved is as high as 30 billion yuan, and among the Chinese companies, only Sun Hung Kai Properties and Cheung Kong Holdings have the strength to compete. However, there are many British and foreign consortiums, so the competition must be fierce.

Of course, Luo Qihong also wanted to get involved, but unfortunately the price of this piece of land was higher than the market value of his company, so he could only think about it.

After all, including the construction costs of this piece of land, the funds required may exceed 80 billion yuan. Moreover, it is a period of real estate market crash and the market value of real estate companies has plummeted, so there is no need to think about the plan of raising funds and issuing shares.

Luo Qihong believes that it is a good thing that the Hong Kong government is willing to provide such a prime piece of land to stimulate the real estate market. As for the effect, it may not be too good, but it is better than nothing.

"How's the discussion with Jianian Real Estate Company going?" Luo Qihong asked, changing the subject.

Cheng Jianshen's expression immediately turned bad, "Jianian Real Estate is still unwilling to give in, and does not want to incur losses on these nine industrial buildings." "Humph!" Luo Qihong sneered a few times, "Ignore him, leave him alone for a while, there is no need to acquire from Jianian Real Estate, you can contact other owners."

"Yes!" Cheng Jianshen nodded slightly. He also felt that the decline of Jianian Real Estate was inevitable. The situation was no longer right, but he still held on to a lucky hope.

"Boss, the Dongchang Building on Cotton Tree Road in Central, developed by Sino Real Estate, will be pre-sold after the Spring Festival. Should we buy some?"

Luo Qihong took the documents handed over by Cheng Jianshen, flipped through them, and said, "I'm not interested in office buildings, but I can try to acquire shopping malls."

"Based on recent transaction records of mid-sized commercial buildings in Central, this Dongchang Building is probably worth 6-7 million yuan, with a price of more than 2 yuan per square foot. The two-story shopping mall requires about 5 million yuan in capital, which is not expensive."

Seeing that the boss was interested, Cheng Jianshen said, "If it costs 3 yuan per square foot, it will cost 5 million yuan."

Luo Qihong saw Cheng Jianshen's greed and said with a smile, "Jianshen, do you want the company to take over the entire Dongchang Building?"

Cheng Jianshen nodded awkwardly, "If we can take over Dongchang Building, it will be a good thing for the company. We can consider raising funds and offering shares."

"The current market value of Zhaoan Real Estate Company is less than that of a Dongchang Building, and the funds raised are also very limited." Luo Qihong sighed and did not hold much hope for raising funds or offering shares.

"I've asked De'an Company's General Manager Bai. Zhao'an Real Estate can raise 3 million yuan, so we only need to borrow 4 million yuan at most. Combined with the current loan of 1 million yuan, Zhao'an Real Estate's market value will definitely exceed 4 billion yuan by then, and the debt ratio will increase to 10% at most." Cheng Jianshen became more and more excited as he spoke.

There are not many real estate companies in Hong Kong with a market value of over 10 billion yuan, probably around 20.

If Zhaoan Real Estate Company can enter the club with a market value of 10 billion yuan, it will be a historic leap and will bring many benefits to Zhaoan Real Estate Company.

But the success of this plan depends on the fact that the city will not collapse. However, Luo Qihong, who is well aware of the direction of history, is worried that Zhaoan Real Estate Company has too much debt and will face the crisis of bankruptcy during the two years of negotiations.

However, owning a medium-sized commercial building in Admiralty was indeed very tempting, and his heart was pounding.

"Who are the competitors for the acquisition of the entire building?" Luo Qihong asked.

Cheng Jianshen shook his head decisively. "No, the colleagues who have contacted Sino Real Estate Company are all looking to acquire a few floors of office buildings, and some are looking to acquire shopping malls, but no one is willing to acquire the entire building."

Luo Qihong lowered his head and thought for a long time. It was true that the market value of Zhaoan Real Estate Company had doubled, but the debts of De'an Company and Zhaoan Real Estate would also increase a lot.

There are still 8 months before the "baptism". Can he clear the debts for Zhaoan Real Estate Company and De'an Company?

"You continue to pay attention to the situation of Dongchang Building. You can also contact Sun Hung Kai Properties, but don't make any promises." Luo Qihong still hasn't made a decision.

This Dongchang Building involves various aspects and needs careful consideration.

If it acquires Dongchang Building, Zhaoan Real Estate Company will own two commercial buildings in Central, and the value of these two buildings alone is more than 2 million yuan.

after a while
Luo Qihong picked up his suit jacket and walked out of the office.

Dean's Office

He summoned Bai Jinyan, naturally to ask about the feasibility of Zhaoan Real Estate Company raising funds and issuing shares.

"Tell Cheng Jianshen that Zhaoan Real Estate Company can raise 3 million yuan. De'an Company holds 42% of the shares and needs to issue shares worth 1 million yuan. Can De'an Company really come up with that?" Luo Qihong said seriously.

Bai Jinyan pursed his lips and said in embarrassment, "I can still get it out by piecing together some things, but I need to mortgage the shares of Zhaoan Real Estate Company I hold."

mortgage!?
Doesn’t that mean it can’t be taken out?
Luo Qihong suddenly felt that Bai Jinyan was being too arrogant. Although De'an Company had expanded dozens of times, it still lacked funds.

"I am considering whether to really acquire the Central Dongchang Building worth 7 million yuan. This is also related to the subsequent development of De'an Company, so I want to hear your opinion."

Bai Jinyan couldn't figure out what Luo Qihong meant, and even his attitude was vague. She thought Luo Qihong really couldn't make up his mind.

"I think Zhaoan Real Estate Company should acquire Dongchang Building at all costs. Although the local market may collapse, even if the local market collapses, Zhaoan Real Estate Company may not be able to acquire such a high-quality property as Dongchang Building."

“Even if there is an opportunity, it will take a lot of time. I looked at the economic crisis in 73, and the property prices in Central only fell by more than 2%.”

There is some truth in what Bai Jinyan said. Many properties in Central are scattered among several owners, making it difficult to acquire them successfully.

For example, the building merging business of Hang Kee Lighting Company, although cheap, consumes a lot of manpower and material resources, and the time consumption is even more serious.

Properties are much cheaper after the big crash, but without the step of raising funds and offering shares, it does not seem to be very cost-effective. Besides, the market conditions are not very bad now, so you can still do something.

(End of this chapter)