A century-old wealthy family that rose from Shanghai

Chapter 460 Real Estate and Shipping

In March 1966, the equatorial sun shone brightly on Sing Tao, but it couldn't dim the surging crowds on Orchard Road.

At the groundbreaking ceremony for the Shangri-La Hotel, invested by CK Asset Holdings Limited, a huge foundation stone was wrapped in red silk, with the words "Foundation Stone Laying Ceremony of Sing Tao Shangri-La Hotel, March 12, 1966" engraved on it in both Chinese and English. The stone was surrounded by baskets of orchids with Southeast Asian characteristics, and the air was filled with the mixed scents of jasmine and sandalwood.

Yan Renmei, arm in arm with her husband Chen Guangliang, slowly walked into the scene.

She was dressed in a moon-white cheongsam with an exquisite lotus pattern embroidered on the collar, and held an ivory-handled round fan in her hand, which both shielded her from the sun and made her look elegant.

"Ms. Yan, your cheongsam is so beautiful."

Mrs. Li Yao quickly came forward and warmly shook Yan Renmei's hand.

Yan Renmei smiled and replied, "You're very pretty too."

The two ladies exchanged pleasantries in a warm and natural manner, defusing the delicate atmosphere caused by the topics of "national sovereignty" and "foreign investment."

At this moment, Li Yao was standing next to the foundation stone, discussing construction details with engineers from Cheung Kong Holdings.

He was wearing a dark suit and a tie with the red and white colors of the Sing Tao flag, and his eyes were filled with excitement.

Seeing Chen Guangliang approach, he grasped the man's hand firmly: "Mr. Chen, your presence puts the people of Sing Tao at ease more than any gift."

"You flatter me. I invested because I am optimistic about Sing Tao's future!"

Chen Guangliang looked around. The workers had already set up temporary scaffolding, and bulldozers were waiting in the distance.

“Mr. Li, Sing Tao is even more vibrant than when I visited last year.”

He pointed to the residential buildings under construction not far away, saying, "It seems that the housing policy is progressing smoothly."

“Thank you for your suggestion. After the refinery project was finalized, many foreign investors took the initiative to come and discuss cooperation. Last week, a representative from Shell Oil said that if it weren’t for your introduction, they would still be hesitant about investing in Southeast Asia.” Li Yao’s voice was filled with gratitude.

The groundbreaking ceremony began promptly at 10:00 a.m.

The emcee introduced the project plan in both Chinese and English: "The Star Island Shangri-La Hotel covers 15 acres, with a total investment of US$50 million, and will be built in three phases. The first phase, the tower wing, will have 28 floors and 320 rooms, and is expected to be completed in 1969; the second phase will include the garden wing and the canyon wing; the third phase will consist of 56 four-story villas, managed as hotel apartments."

A round of enthusiastic applause erupted from the audience, and the Sing Tao Finance Minister nodded repeatedly in the crowd.

He held a project feasibility report in his hand, which showed how much tourism revenue the hotel would bring to Sing Tao each year and how many jobs it would create—a timely help for Sing Tao, which had only been independent for six months and had a high unemployment rate.

"Now, let us invite Mr. Chen Guangliang, Ms. Yan Renmei, Mr. Li Yao, and Mrs. Li Yao to join us in laying the foundation stone!" As the emcee's voice fell, the four guests picked up gilded shovels and slowly shoveled the red soil, symbolizing "hope," into the foundation pit.

The sound of camera shutters clicking was constant at the scene. The reporter from Sing Tao Times specifically focused his lens on Yan Renmei, the wife of Hong Kong's richest man. Her elegant demeanor and graceful movements created a wonderful harmony with the tropical atmosphere of Sing Tao.

After the groundbreaking ceremony, Li Yao stepped to the microphone, his voice tinged with sincerity: "A friend in need is a friend indeed! After Sing Tao separated from Malaysia, facing the difficulties of freshwater shortages and a single economic model, Mr. Chen was the first to invest with real money. From discussing cooperation last August to breaking ground this March, in just six months, CK Asset Holdings demonstrated their sincerity with efficiency. I believe that this hotel will not only be a new landmark on Orchard Road, but also a bridge of trust between Sing Tao and international capital!"

Chen Guangliang took the microphone and glanced at the Sing Tao officials and Chinese representatives in the audience: "Actually, investing in Orchard Road is an idea I had ten years ago. When I first came to Sing Tao, I felt that this street had the potential to become a 'shopping, hotel, and office complex'. In the future, Cheung Kong Holdings plans to continue investing in building shopping malls and office complexes on Orchard Road, making it the 'business heart' of Sing Tao."

"Welcome! We welcome you with open arms!" Li Yao excitedly took over the conversation, and applause rang out again.

Looking at her husband's calm and confident demeanor, Yan Renmei's eyes were filled with pride—she knew that her husband was not only doing business, but also paving the way for Chinese capital to gain a foothold in Southeast Asia.

At the midday reception, Li Yao deliberately pulled Chen Guangliang aside and handed him a glass of Sing Tao Commander liquor: "Mr. Chen, the oil refining industry you proposed is progressing faster than expected. The joint venture agreement between Global Group and Shell Oil has been signed; the next step is to finalize the implementation agreement. Our Sing Tao government will fully support you."

“We must make good use of Jurong Island’s deep-water port advantage.” Chen Guangliang took a sip of his drink. “More importantly, the Sing Tao government has the determination to develop the economy, which is what reassures us foreign investors the most.”

In fact, if the British troops were to prepare to withdraw from Sing Tao in two years, it would immediately cause tension among foreign investors, especially since these British troops would be responsible for 30,000 jobs in Sing Tao. One can imagine how tense things would be in Sing Tao at that time.

In the afternoon, Mr. and Mrs. Chen Guangliang visited the proposed site for an oil refinery on Jurong Island.

Standing by the sea, watching the workers surveying the terrain, Yan Renmei asked softly, "What will this place become in the future?"

"It will become the 'economic engine' of Sing Tao."

Chen Guangliang pointed to the distant sea, "More than ten years from now, there will be towering oil refineries and oil tankers shuttling back and forth here. The per capita GDP of Xingdao will be double what it is now."

Yan Renmei smiled and nodded; she trusted her husband's judgment.

A week later, the atmosphere in the conference room at the headquarters of CK Asset Holdings in Hong Kong was completely different from the enthusiastic atmosphere at Sing Tao Daily.

The senior executives of CK Asset Holdings sat around a mahogany conference table, with site plans and financial statements spread out in front of them, and everyone had a serious expression.

Chen Guangliang sat in the main seat, tapping his fingers lightly on the table, his gaze sweeping over everyone: "Everyone has seen the 'Nine Measures to Stabilize the Property Market' introduced by the Hong Kong government last week, right? Lowering mortgage rates, extending repayment periods, relaxing building approvals... These measures can bring a temporary recovery to the property market, but they are just a 'stimulant,' not a 'miracle cure.'"

He pushed a bank credit report to the center of the table: "According to monitoring data from Ping An Bank, the amount of real estate loans from major banks in Hong Kong has decreased by 40% compared to last year. The shadow of the collapse of Mingde Bank and Guangdong Provincial Trust Bank still lingers, and no bank dares to lend easily—this is the 'Achilles' heel' of the property market. Therefore, we must seize the time to sell the land we bought at low prices last year and recover funds; moreover, from now on, we must stop buying new land, as next year will be even more difficult than now."

As soon as he finished speaking, the conference room fell silent. Chen Wenjie sat to his father's right, his face slightly flushed. After the collapse of Guangdong Provincial Trust Bank last year, it was he who suggested "quick turnover"—buying up stalled construction sites at rock-bottom prices and rapidly developing and selling them. Although his father agreed at the time, he also reminded him to "have a backup plan." Now, his father clearly stated that "next year will be even more difficult," obviously anticipating the long-term risks in the real estate market, which made him feel somewhat ashamed.

However, Chen Wenjie quickly adjusted his mindset. He stood up first and picked up a list of land sites: "Dad, I agree with your decision. We currently have ten construction sites, six in Kowloon and four in Hong Kong Island. We acquired them from creditors of Guangdong Provincial Trust Bank at low prices last year, with costs 40% lower than the market price. If we sell them at the current market price, we can make a good profit. I plan to start listing them next month."

Lu Xiaoqing then stood up. As one of the core members of Cheung Kong Group's second-generation leadership, he naturally had to speak up for Chen Wenjie: "Wenjie is right. Last year, Guangdong Trust Bank collapsed, and 100 construction sites in Hong Kong were halted. After screening, we acquired ten of the best-located sites—the Yau Ma Tei site in Kowloon is close to the MTR station, and the Causeway Bay site on Hong Kong Island is next to a commercial district. These are all good projects that are easy to sell. However, although the Hong Kong government's policies can stimulate short-term demand, the overall trend of banks tightening credit has not changed. Now is indeed the best time to sell. A quick deal and a small profit are not a problem."

The two men, working in tandem, acknowledged the rationale behind their previous "bottom-fishing" strategy while simultaneously supporting Chen Guangliang's current decision to "sell off," cleverly defusing the awkward situation.

Seeing this, the other executives nodded in agreement.

Chen Guangliang looked at the two men, a hint of relief flashing in his eyes—Chen Wenjie had done the right thing: buy at the bottom and sell quickly, that's how you keep your stock flowing and you won't lose money.

In fact, even if they buy at the bottom now and sell next year, it won't have much of an impact on the size of CK Asset Holdings; they could even stop selling next year and wait for the property market to recover before resuming sales.

"Xiaoqing is right, money supply is the foundation of the real estate market."

He slowly said, "What Cheung Kong Group needs to do next is, firstly, accelerate sales and clear out all the land under construction in its hands within 6 months; secondly, tighten its banking relationship and strive to develop industries with strong risk resistance such as hotels, commercial complexes, and food and beverages; and thirdly, suspend all new land acquisitions and wait for opportunities."

He paused, then picked up a copy of the group's financial report: "Don't worry too much. Cheung Kong is not just a real estate company, but a diversified group. Our hotel business—Shangri-La, Miramar Hotel, and Furama Hotel in Hong Kong—saw revenue growth of 12% last year; our commercial complexes—Paterson Street in Causeway Bay and Cheung Kong Plaza—have stable rental income; our food and beverage business—Vitasoy Group's beverages, instant noodles, etc.—has seen stable growth in overseas sales; and our department store retail—Lane Crawford and Wellcome supermarkets. Even if the profits from developing the real estate business decrease, the other sectors can still support the group's development."

The executives' expressions gradually relaxed.

They had a feeling that the boss simply wanted to give his successor a warning and to ensure he maintained a stable approach.

One evening in late March, the banquet hall of the Shangri-La Hotel in Central, Hong Kong, was brightly lit and filled with elegantly dressed people.

A banquet hosted by the Hong Kong Shipping Association is being held here, with the light from crystal chandeliers shining on the guests' gowns and reflecting a luxurious glow.

Waiters carried silver platters of champagne, weaving through the crowd, with conversations in English, Cantonese, and Mandarin filling the air – this place brought together the elites of Hong Kong and even the global shipping industry.

Chen Guangliang was surrounded by a group of people, becoming the focus of the entire event. He was wearing a custom-made dark blue suit, with a tie in the signature color of Global Shipping—sea blue. On his chest was a badge shaped like an anchor, which was custom-made for him by his employees last year when Global Shipping's tonnage exceeded 500 million tons.

"Mr. Chen, I heard that Global Shipping has installed exhaust gas generator systems on each of the 15 VLCCs it ordered from Japan?" a Hong Kong shipowner asked, raising his glass with curiosity. "Can this technology really save 2.5 tons of diesel fuel per day?"

“Of course,” Chen Guangliang nodded with a smile. “The nickel-chromium-molybdenum alloy pipes we jointly developed with Mitsubishi Heavy Industries and Sumitomo Metal can withstand the high temperature of exhaust gas up to 400 degrees Celsius, and their corrosion resistance is three times stronger than that of ordinary steel.”

Those around him nodded in agreement. They all knew that Chan Kwong-leung was never one to keep secrets—last year he shared his experience in operating container ships with his peers, which spurred the containerization transformation of the entire Hong Kong shipping industry.

This "win-win" mindset earned him a very high reputation in the shipping industry.

Just then, a middle-aged man in a light gray suit squeezed in. He was of medium build with sharp eyes; he was none other than Bao Yugang, a rising star among Hong Kong's second-tier shipowners. Holding a shipping report, Bao Yugang spoke with a respectful tone: "Mr. Chen, I apologize for disturbing you. I heard that you ordered 15 VLCCs from Japan, each with a deadweight tonnage exceeding 20 tons, and specifically named them 'Very Large Crude Carriers' (VLCCs). May I ask, was the instability around the Suez Canal what prompted you to make this decision?"

As soon as he said this, everyone around fell silent, and all eyes were on Chen Guangliang.

When the Suez Canal closed in 1956, Hong Kong shipowners made a fortune by circumnavigating the Cape of Good Hope, a period they still vividly remember. If Chen Guangliang anticipates the canal will close again, then ordering large oil tankers now is undoubtedly a way to seize the opportunity.

Chen Guangliang looked at Bao Yugang, a hint of admiration flashing in his eyes. Although this shipowner started late, he had a keen eye and was down-to-earth in his work, making him a rising star in Hong Kong's shipping industry.

Instead of answering directly, he picked up his champagne glass and took a small sip: “Mr. Bao is very observant. The world is still unstable. The situation in the Middle East and the rivalry between the US and the Soviet Union could all affect shipping routes. The advantage of large oil tankers and large cargo ships is that even if the Suez Canal is closed, they can still navigate the Cape of Good Hope route. Moreover, they have a large carrying capacity and low unit transportation costs—this is what I believe is the future trend of the shipping industry.”

He paused, then changed the subject: "Of course, small boats also have their advantages. For example, they are fast, meeting the urgent needs of passengers; they can adapt to some shallow-water ports, making them suitable for transporting high-value-added goods. Therefore, the fleet layout should be a combination of large and small vessels, with some operating 'ocean-going giants' and others operating 'flexible fast boats', in order to meet different market demands."

When everyone heard this, they suddenly understood.

The smart ones already understood that Chen Guangliang was implying that the Suez Canal might close again, and that large oil tankers would become the mainstream in the future; the less astute ones, although they didn't fully understand, knew that following Chen Guangliang's direction was probably the right thing to do.

Bao Yugang's eyes lit up, and he gripped Chen Guangliang's hand tightly: "Thank you for your guidance, I understand!"

Halfway through the banquet, Bao Yu quietly left the banquet hall. He quickly walked to the hotel's phone and dialed the number of HSBC's senior manager, Sanders.

“Mr. Sandas, I am Bao Yugang.” His voice was filled with barely suppressed excitement. “I would like to discuss with you the matter of ordering large oil tankers, preferably through a joint venture…”

At that moment, Sandas was entertaining guests at home. After receiving Bao Yugang's call, he immediately instructed his butler to attend to the guests and went to his study: "Mr. Bao, how many ships do you want to order? How much funding do you need?"

“Three 200,000-ton VLCCs, totaling $80 million (the price increased after the order volume),” Bao Yugang said quickly. “I hope HSBC can provide me with a loan, and we can jointly invest the other 50%. Mr. Chen from Global Shipping has already hinted that the Suez Canal may close, this is a rare opportunity!”

Sandas's eyes lit up instantly.

During last year's bank run, HSBC failed to cripple Ping An Bank, allowing Chen Guangliang to seize the opportunity to acquire a stake in Hang Seng Bank, a fact that has lingered in Chen's mind ever since. Now that Bao Yugang has taken the initiative, he is naturally happy to support him.

We'll discuss this in detail tomorrow.

(End of this chapter)