A century-old wealthy family that rose from Shanghai

It’s Spring Again (1959).

Chen Guangliang led his team to Japan to investigate the shipbuilding industry, with his first stop being Hitachi Heavy Industries in Osaka. Accompanying him was his second son from his eldest wife, Chen Wenming.

Keizo Kobayashi, president of Hitachi Heavy Industries, Ltd., led a group of people to welcome him.

In a shipyard, Keizo Kobayashi pointed to the ship under construction and said, "Mr. Chen, this is the 100,000-ton oil tanker 'UNIVERSE APOLLO' that we are building. It will be launched in June this year and will use a single propeller."

Chen Guangliang said, "The biggest fear for large oil tankers is accidental crude oil leakage. What new measures does your company have in this regard?"

Oil spills are major disasters, especially those in the waters off Europe and the Americas, which can bankrupt ship owners. Of course, they are controllable, relying not only on the professionalism of skilled seafarers and the shipyard's technology, but also on insurance coverage.

A Japanese engineer immediately replied, "We used Sumitomo's double-hull technology, and the steel plates were also 3 inches thick. These new measures effectively prevent accidental oil leaks, thereby reducing potential environmental pollution."

"Yes, it is definitely safer now."

Subsequently, Chen Guangliang began to delve into the shipyard to investigate, asking about many technical aspects in detail.

The shipbuilding technology he accumulated greatly benefited China's shipbuilding industry in the future. After all, China had been closed off from the world for so many years and had long since fallen behind. At the beginning, the shipbuilding industry did not even understand international standards; it was not enough to only understand Soviet standards.

The first day was spent assessing the technology, and the second day was spent negotiating terms in the conference room.

This was at the beginning of a shipping downturn, and given Chen Guangliang's influence in the global shipping industry, Japan showed great sincerity.

Keizo Kobayashi began, "Mr. Chen, our quote for an oil tanker of the same model as the 'UNIVERSE APOLLO' is US$15 million. Furthermore, the Japanese government strongly supports Japanese shipbuilding, allowing banks to provide loans for up to 60% of the cost at an annual interest rate of 5.5%."

Price is an advantage, and so is access to loans.

Currently, the price of new oil tanker construction has been driven down to $1.5 million per 10,000 tons, whereas it used to cost more than $3 million. The shipbuilding industry does not follow inflation; on the contrary, it will become cheaper and cheaper due to technological changes.

For example, around 1998, South Korean shipyards had already reduced shipbuilding prices to $1 million per 10,000 tons; of course, special vessels are an exception.

In addition, after the 'oil crisis', ship owners will also need to consider the issue of oil prices and focus on high-efficiency and energy-saving technologies.

At that time, a ton of oil cost less than $3, and few ship owners paid attention to this issue.

Chen Guangliang asked, "What about the shipbuilding cycle?"

Keizo Kobayashi replied, "Generally, it takes 16 months to launch and test a ship! I wonder how many ships Mr. Chen plans to build?"

Chen Guangliang said, "We plan to build four this year."

Upon hearing this, Keizo Kobayashi's face lit up with joy. He had long anticipated that once Universal Group started shipbuilding, it would place a large order.

"I wonder if Mr. Chen has any objections to the quote or the loan?"

Chen Guangliang then said, "I have no objection to the quote, but I hope the loan amount can be increased to 80% with an interest rate of 5%. Of course, I know I need to negotiate with Japanese banks, but I hope Hitachi Heavy Industries can act as the negotiator!"

He doesn't actually lack money, but if the interest rate is only 0.5%, he feels that taking out a loan is more worthwhile.

He feels safer with his money in hand!

Moreover, it is expected that 50 tons of new ships will be built this year, another 50 tons next year, and the year after that. In three years, it is expected that by 1962, the total tonnage of the Universal Group will reach 300 million tons.

The rise of global shipping naturally means that the biggest impact will be on Greece and Japan, while European and American shipping has already declined. Japan supports shipbuilding but not shipping; instead, it encourages Hong Kong shipowners to build ships in Japan and then lease them to Japan.

“Okay, I believe the Japanese banking industry will not refuse Mr. Chen’s reputation.”

The terms were quickly agreed upon, as the Japanese government was very determined to support the shipbuilding industry, so the government instructed the banks to offer substantial preferential treatment.

In a luxurious villa in Tokyo, Chen Guangliang is with Si Yezi.

Si Yezi also gave birth to two sons for Chen Guangliang. The eldest son, Chen Wenying, is 5 years old this year, and the second son, Chen Wensheng, is 2 years old this year.

In the pavilion, Chen Guangliang sat cross-legged on a futon, while Si Yezi, dressed in a brightly colored kimono, knelt on the futon, reporting on the investment situation to her man.

"Mr. Chen, we currently have investments in 15 stocks, with a total cost of US$200 million, and the current market value exceeds US$500 million. Among them, Sony, Panasonic, and Toyota have seen the largest increases. The remaining assets are fixed assets, including this villa and a property in Ginza, with a total value of slightly over US$300 million, including last year's dividends and rent."

Before she knew it, Si Yezi had amassed a fortune of 800 million US dollars.

Of course, Chen Guangliang gave a total of about 350 million US dollars.

After all, they were two sons, and Chen Guangliang had to give them some money; more importantly, Japan's economy was large, and investment required funds.

"Si Yezi, this time I'll teach you how to invest with loans!"

Si Yezi raised her head, looked at her man with her beautiful eyes, and then carefully said, "Mr. Chen, haven't you always warned me not to go into debt?"

Chen Guangliang deliberately became serious and then said, "So, are you questioning me?"

Si Yezi immediately sat up straight and bowed to Chen Guangliang, saying, "No, I'm just too stupid to understand!"

"Haha," Chen Guangliang laughed, "You're right, you really are too stupid! If you take out a loan on your own, let me ask you, how much risk do you have to bear? But if I ask you to take out a loan, do you need to bear the risk?"

Si Yezi understood immediately. If Mr. Chen asked her to take out a loan, then he would naturally be her support; if she took out a loan on her own, Mr. Chen would be very unhappy.

"Hey, I get it!"

Chen Guangliang has always warned his children not to start their own businesses lightly, or at least to discuss it with him; because he understands that as long as his children don't start businesses, the wealth he gives them will last for generations. In his previous life, Li Zeju inherited Li Jiacheng's family business and maintained it, even selling off assets at its peak, but rarely made large-scale investments. His assets are unknown, and there are probably few wealthy people in the world who can come up with such a large cash flow.

In his past life, Adrian Cheng founded K11 shopping malls. Initially, he enjoyed immense success, embarking on a massive acquisition spree, investing hundreds of billions in mainland China alone. However, the result was that he nearly destroyed New World Development. Of course, it's undeniable that listed companies are listed companies, and the cash flow and fixed assets of these families are often hidden and untold.

Therefore, Chen Guangliang was actually unhappy to see his children start their own businesses on their own. Of course, if they really did start a business and failed, it seemed that his family could afford the losses.

"Si Yezi, we should be able to get a loan of over $100 million by mortgaging the property in Ginza; in addition, I'll give you another $100 million as compensation for your hard work in raising my son. We'll invest all of these funds in securities. I've already picked out the stocks; we'll continue buying Toyota, Panasonic, Sony, Hitachi, and Toshiba."

Investing in these stocks was a long-term investment, and theoretically, the money was to be cashed out by the end of 1989.

However, Japan seems to have made some concessions during the Olympics (1964), but of course, none of that matters and there's no need to worry about it.

Si Yezi had short hair like Audrey Hepburn, exuding the charm of a traditional Japanese woman. Upon hearing that she could obtain funds again, she was not very happy, but said, "Mr. Chen, my two sons are also mine, I don't need any hardship fees."

Chen Guangliang beckoned to Si Yezi, who immediately got up, took small steps to Chen Guangliang's side, and then lay down in his arms.

Beneath the brightly colored kimono was fair and delicate skin.

Chen Guangliang stroked her face and said, "I want my sons to become the richest people in Japan, so I will keep giving you money and teaching you how to invest. When they grow up, I will personally guide them in investing in businesses. So, this money is not a reward, but my responsibility as a father."

Si Yezi wasn't very happy because she was worried about whether Chen Guangliang was truly sincere in this relationship, or if he was just trying to get rid of her with money.

"So, am I considered your wife?"

"Yes, yes, it's my fourth wife."

Si Yezi was overjoyed and said, "I know it's inconvenient for you to make our relationship public, but your words are enough."

Chen Guangliang said with emotion, "It's not that it's inconvenient to go public, but my children from previous marriages have grown up, and it's not appropriate to make a big fuss about it."

There's no need to try to reconcile them anymore. Even Audrey Hepburn's three children wouldn't have the same good relationship as the children of Yan Renmei and Jiang Meiying's families.

After all, the children from both families had spent a long time living together in Hong Kong, and their relationship had been built up since childhood.

If Audrey Hepburn's children are like this, then introducing Si Yezi's children would probably have the opposite effect.

However, Chen Guangliang plans to establish a family office in the 1960s, at which time Si Yezi and her children will be allowed to enter. Whether the children can cooperate or become friends after they grow up will depend on their own wishes.

Overall, the children of the four wives have no direct conflict of interest and may even cooperate in business in the future.

With the development of Hong Kong's economy, a large amount of overseas capital has also flowed into Hong Kong, including capital from Southeast Asia and Europe and the United States.

Capital poured into Hong Kong, with the largest investment in the real estate sector. As a result, Hong Kong's real estate market recovered quickly after the crash last year (1958) and has risen significantly.

Land prices continued to see the largest increase, with the average price of residential land reaching HK$180-200 per square foot, industrial land at HK$160-180 per square foot (industrial land was valuable during this period), and commercial land in Central reaching as high as HK$1600 per square foot.

In other words, a prime commercial plot of land in Central that can be used to build a first-class commercial building already requires a budget of 2000 to 3000 million.

Chan Kwong-leung owns six valuable properties in Central: the Universal Group Building on Des Voeux Road Central, the Shangri-La Hotel on Des Voeux Road Central, Cheung Kong Plaza (formerly Lane Crawford Building) on ​​Pedder Street, the Connaught Building (formerly Hong Kong Hotel) on Pedder Street, Lane Crawford Building on Queen's Road Central, and Ping An Bank Building at 1 Garden Road.

These six valuable properties alone are worth more than HK$2.5 million.

In the conference room of CK Asset Holdings Limited, senior executives gathered, including those from the real estate business, hotel business (Shangri-La Hotels and Resorts), retail business (Lane Crawford Group), and food business (Vitasoy).

Sitting in the chairman's seat, Chan Kwong-leung said with great enthusiasm, "Ladies and gentlemen, I plan to list Cheung Kong Holdings within three years. The listed assets will include four major assets: real estate, hotels, retail, and food, but will not include land reserves or sites awaiting redevelopment. Therefore, before that, we need to redistribute the business, assigning the land reserves and sites awaiting redevelopment to my private companies, while the debt will remain on the listed assets."

Later, Yan Kuan asked, "What is the purpose of listing? Cheung Kong Holdings currently has very strong profitability. Rental income from the commercial sector already accounts for a large proportion, and hotels, retail, and food can all contribute significantly to profits."

The implication is that Cheung Kong can develop without going public.

Chen Guangliang nodded, but then said, "After entering the 1960s, many buildings required strong financial support, such as the commercial complexes on Orchard Road in Singapore, the Shangri-La Hotel in Singapore, and the layout of commercial real estate in Japan. The advantage of listed companies is that they can raise funds and turn shareholders' money into their own money without paying huge interest expenses, which is conducive to the long-term development of the company."

Jardine Matheson went public in 1961 with a peak market capitalization of HK$31 billion, raising HK$9 million. However, its market capitalization plummeted the following year, leaving it with only a little over HK$10 billion.

This is blatant robbery!

Although Cheung Kong Holdings' reputation in Hong Kong is not as good as Jardine Matheson's (discussed separately), it easily raised hundreds of millions of dollars when it went public in 1961.

With this money, Chen Guangliang bought land and property in Singapore, Japan, and Hong Kong, essentially taking the shareholders' money into his private hands.

The stock price of Cheung Kong Holdings will inevitably plummet due to the banking crisis and other reasons, and he will then increase his stake to 75%.

The listed status should still be maintained, but a large number of new shares can be issued during each stock market boom; and the equity can be increased to 75% during stock market downturns.

In this way, the listed company would have a continuous flow of funds, while the Chen family could still maintain firm control.

A senior executive also said, "There are many advantages to going public, but there is one disadvantage, which is that profits will be shared with shareholders."

The implication is that you should be careful not to dilute your shareholding; besides, you don't lack money, so why bother!
Chen Guangliang nodded first, indicating that he was listening carefully to everyone's opinions, and then said, "It's alright. Appropriate sharing can help improve the company's visibility. Moreover, Cheung Kong Group will not be satisfied with being a local Hong Kong conglomerate; sooner or later, it will have to expand overseas."

"Ok"

No one voiced any further objections; instead, they began offering suggestions and plans for the asset division and pre-IPO arrangements. (End of Chapter)