A century-old wealthy family that rose from Shanghai

Time flies, and we've already entered the second half of the year.

During the summer vacation, the Chen family held another reunion, spending a week in the villa complex in Discovery Bay.

Chen Guangliang is the founder of the family, which spans three generations and has a total of nearly fifty members.

The first generation consisted of one husband and four wives, totaling five people;

The second generation consists of 11 sons and 4 daughters. Six sons are already married and one daughter is married, so there are actually 20 second-generation members.

The third generation consists of 23 people, including 16 boys and 7 girls.

In the second generation, there is actually a significant age gap. Seven of them were born before 1943, while the other eight were born starting in 1952.

Chen Guangliang's youngest child is Si Yezi's daughter, who is only 10 years old.

Chen Guangliang's eldest grandson is already 18 years old and in college. When he meets those younger than him, he has to respectfully address them as "uncle" and "aunt".

In fact, it is impossible to say that family members are 'loving each other' in just one week, or two reunions a year, totaling two weeks.

Chen Guangliang naturally understood this as well. In fact, he didn't care about this aspect at all. The two annual reunions were simply to allow the third generation of the fourth branch of the family to get to know each other.

However, the concept of 'family' is deeply ingrained in the hearts of the second and third generation of Chen family members. It is something passed down from generation to generation. Chen Guangliang is still confident that this family is more united than those older families.

After the gathering, Chen Guangliang held a family office meeting in the Ping An Bank Building.

The participants included the four wives and concubines, as well as the eldest son of the four wives, who, together with Chen Guangliang, formed the 'Permanent Council' of the family office.

Since 1975, family offices have been able to provide a wide range of services to family members. For example, if a family member wants to go skiing in the Alps, the family office in Switzerland will make arrangements in advance. Of course, the annual operating cost has reached as high as HK$2000 million.

Even at this stage, Chen Guangliang appointed his son as the 'core' of the investment department, without having to pay the salary of a 'top investor'.

Of course, the assets of the 'Chen Guangliang Family Office' now exceed US$8 million (HK$46 billion), and its annual profit is no less than HK$5 million.

"Tell me, how's the gold investment going?" Chen Guangliang sat at the head of the meeting room, flanked by his beloved concubines, and below him were his four 'eldest sons'.

Starting this year (1976), gold prices fell below US$130 per ounce, and Chen Guangliang naturally ordered the 'Chen Guangliang Family Office', 'Ping An Investment', 'Ping An Bank', and private investments from various branches of the family to enter the market.

After all, this is a huge market and a super investment that has increased fivefold in five years.

Chen Wenjie began by stating, "Regarding the gold investment situation of our family office (Hong Kong): We currently hold 30 tons of gold in Hong Kong. Now that Hong Kong allows the free import and export of gold, our family has many ways to invest in physical gold, including through banks and jewelry companies."

Chen Guangliang nodded in satisfaction. Hong Kong allowed the free import and export of gold in 1974, and the gold import limit that year was 100 tons. However, by that year, gold had already reached its peak, and the Chen Guangliang family began to cash out their gold gradually when it reached US$180 per ounce in November.

Later, Chen Wenjin and Chen Wenou gave work reports, stating that the family office had purchased 4 tons, 4 tons, and 2 tons of gold in London, Zurich, and New York, respectively, and deposited them into local banks.

一吨黄金为3.5万盎司，以130美金每盎司计算（实际更低），差不多是455万美金；而美元与港币的汇率是1:5.5，也就是一吨黄金约合2500万港币。

In just six months, the Chen Guangliang family has purchased 40 tons of gold, which only amounted to HK$10 billion.

Chen Guangliang then said, "I will borrow HK$30 billion from various branches and companies in the name of the family office; and in the next year and a half, I will continue to purchase 120 tons of gold. This move will ensure that the family office will be able to support the stability of the family and the operation of the family office in the 80s."

As soon as he finished speaking, everyone voiced their support.

Yan Renmei then said, "We can borrow money from Global Group, Yangtze River Industrial Group, and Ping An Bank, so it shouldn't be a big problem."

Although the business has been passed down to her four sons, she still understands that the cash flow of Global Group and Cheung Kong Industrial Group are both in the billions of Hong Kong dollars, while Ping An Bank is a bank loan.

At this point, even though her husband said he was borrowing it, she was still willing to lend it.

Jiang Meiying quickly added, "I can also raise 2 million US dollars through my personal investment businesses."

Chen Guangliang interrupted Audrey Hepburn and Si Yezi's statements, saying, "I am aware of the specifics, and I will make the arrangements. Of course, the funds borrowed by the family office from various companies will definitely be repaid in the future. In addition, if these companies have good investments, they can take advantage of bank loans, since our family's loans are relatively small. So overall, it's just that the family office is not convenient to get loans, but I believe the impact will not be significant."

Everyone nodded in agreement; that was indeed the case.

Chen Guangliang will naturally allocate the loan funds according to the situation of each company, ensuring that each real estate company will not get into trouble due to cash flow issues, nor will he sell any stocks or anything like that.

Finally, Chen Guangliang said, "There are also opportunities for gold investment, such as futures. Gold may rise to seven or eight hundred US dollars per ounce in the early 1980s. At that time, I will inform you all to invest in futures or spot. Of course, without my order, you should not invest in futures on your own. There is no need to take risks."

"Yes, father"

After the meeting about family offices concluded, Chen Guangliang called Yan Renmei, Chen Wenjie, Jiang Meiying, and Chen Wenhua to the conference room.

"I have a task to arrange. Wenhua, you're going to sell your 51% stake in Haifeng Bank in New York. As far as I know, Haifeng Bank ran into trouble in 1974-1975 due to bad loans caused by the US economic recession. Its profits reached US$4400 million in 1973, but it's estimated that only a third of that is left now."

Chen Wenhua immediately asked, "Father, is this my personal investment or a family investment?"

Chen Guangliang shook his head and said, "It's not an investment! Simply put, in Hong Kong, I want Cheung Kong Holdings to acquire Hutchison Whampoa from HSBC, but our two conglomerates are competitors, and it's difficult for HSBC to hand it over to a competitor. However, from what I understand, HSBC wants to globalize its business, so the United States is undoubtedly the best bridgehead. Therefore, entrusting you to acquire 51% of SITC Bank's shares is just a bargaining chip in Hong Kong. As for whether you personally invest in the bank, I suggest that it's not necessary for the time being."

There's really no need to wait for the third generation; it's already impressive enough.

Chen Wenhua replied without hesitation, “No problem! Based on Haifeng Bank’s current situation, the acquisition cost is estimated to be over 2 million US dollars. However, Haifeng Bank is a listed company, and a direct acquisition would obviously be too expensive. I think we can discuss with Haifeng Bank’s board of directors the possibility of first purchasing a portion of the shares from the market at a favorable share price, and then having the board issue new shares.”

As a newly emerging "stock market guru" in the Chinese community, Chen Wenhua's advice is textbook-worthy.

A hostile takeover is clearly impossible. Chen Wenhua is of Chinese descent, and his high-profile approach would be counterproductive.

Then the only option is a friendly takeover. A friendly takeover means appealing to the board of directors.

The board of directors naturally wants SITC Bank's share price to rise and for SITC Bank to obtain funds in order to get out of its current predicament.

Chen Wenhua's plan involves a phased acquisition: in the first phase, he will purchase a portion of the equity at a price higher than the market price, which is expected to boost investor confidence; in the second phase, Haifeng Bank will issue a number of new shares and sell them to Chen Wenhua, thus providing Haifeng Bank with a large amount of cash flow to alleviate the company's operational difficulties.

Chen Guangliang said, "Well, as for the funds, you two wives can chip in, and loans are certainly an option. But don't sell any of your investment assets or shares. If that's not enough, I'll find another way."

The second wife's assets are already worth four to five billion US dollars. This time, they lent 200 million US dollars to the family office, and now they need to come up with another 200 to 300 million US dollars for acquisitions. The task is big, but not impossible to complete.

Jiang Meiying immediately replied, "It's not a big problem. With so many properties mortgaged, we can get the funds."

Yan Renmei grasped her best friend's hand to express her gratitude, after all, the acquisition of Hutchison Whampoa was an expansion of her eldest son's business.

Chen Guangliang then said, "Yes, the cash flow of each branch of our family is very sufficient, and even if there are loans, it is very healthy."

At this point, Chen Wenhua added, "Father had a keen eye, leading us to start buying at the bottom in September 1974. Now, whether it's the US, Japan, or Hong Kong, when the stock market is at its lowest point, it experiences significant gains, resulting in a surge in investment assets. You are the pillar behind us. This time, under your guidance, our two families have cooperated in a small way. We hope there will be more opportunities like this in the future!"

Jiang Meiying then said, "This isn't the first time we've collaborated. When Sheraton came to Hong Kong to develop its business, your older brother was personally involved!"

"Okay, that's too much talk, you're being too polite!"

Time flies, and three months have passed in the blink of an eye.

In the executive conference room of the Hilton Central Hotel, Peter and Charles, two American real estate developers from Texas and major shareholders of the Hong Kong-listed company 'Yung Ko Company', were negotiating an acquisition with Chen Wenjie and Lu Xiaoqing of Cheung Kong Holdings.

Six months ago, Chen Wenjie expressed his willingness to Peter and Charles to acquire their 56.5% stake in Yonggao Company; however, the two shrewd Texas real estate developers had been dragging their feet, but now they are starting to soften their stance.

Chen Wenjie quickly said, “Mr. Peter, Mr. Charles, as far as I know, the US economy hit a slump in 1974-1975, but there are faint signs of recovery this year. If I were you two, I would sell the shares of Yonggao Company to us and withdraw the funds to buy up assets in the US at rock-bottom prices. On the contrary, Hong Kong experienced an economic downturn from 1973 to 1975. Although there has been some improvement, the stock market has clearly remained sluggish.”

These words immediately made the two Texas real estate developers secretly exclaim "shrewd!" They actually thought so too, which is why they restarted negotiations this time.

The bearded real estate developer named Peter, feigning composure, said, "Mr. Chen, we've always said we're open to selling, but only if the price satisfies us."

Charles then nodded and said, "The land alone for the Hilton Hotel in Central, Hong Kong, owned by Yonggao Company, is quite valuable."

At this time, the land of the Hilton Hotel was only part of the land of the previous 'Cheung Kong Center'. It was because it was combined with the adjacent Garden Road parking lot and Gongbei Road that there was enough land to build the skyscraper.

Chen Wenjie immediately said, "We can consider a 30% premium and are willing to purchase your 10,479,088 shares of Yonggao Company at HK$12.05 per share, involving HK$1.26 million."

The price was already quite good, and Chen Wenjie was also worried that things might change if he waited too long. This site wasn't just any site; it was the headquarters building of Cheung Kong Holdings, so the price was reasonable, and a quick deal was the priority.

As expected, the two Texas real estate developers readily agreed to the price, while also indicating that they did not want to make another trip from the United States to Hong Kong to negotiate.

"Father, the equity agreement for Yonggao Company has been finalized. The total investment is HK$1.26 million to acquire 56.5% of the shares." Chen Wenjie reported this news to his father immediately.

Chen Guangliang sat at his desk, looked up, and said, "The price is good, everyone seems satisfied, right?"

Chen Wenjie nodded.

Chen Guangliang continued, "In that case, after the transaction is completed, we will immediately privatize Yonggao Company and then temporarily transfer it to the Shangri-La Hotel Management Group."

Chen Wenjie said, "Yes. As for the management rights of the Hilton Hotel, I plan to bid for the land in Tsim Sha Tsui later and then discuss the termination or transfer with them."

If Hilton Group's management rights/authorization partnership is terminated, a sum of money will definitely be required as compensation. In his previous life, Li Jiacheng terminated his partnership in the 90s and had to pay 1 million yuan in compensation.

Hilton Group's management rights were acquired in the 1960s through a partnership with Yonggao Company, meaning the contract was set to expire around 2010, a full fifty-year term.

Of course, if the contract were lifted in the 1970s, the compensation would be less, since it would be based on the current turnover.

Chen Guangliang said, "That piece of land will definitely be auctioned off next year."

This year, two plots of land in Tsim Sha Tsui East have been auctioned off. Cheung Kong Holdings won the first plot, while Sino Land acquired the second, with prices around HK$3000 per square meter.

Chan Kwong-leung is certain that the land next to Cheung Kong's plot will be auctioned next year. This is based on the Hong Kong government's usual practice. Auctioning the adjacent land next year can drive up land prices and also benefit the future development of Tsim Sha Tsui East.

Chen Wenjie nodded. There was no need to worry about that, since no real estate company could rival Cheung Kong Holdings.

However, he then reported: "Father, I have negotiated with British American Tobacco about the site of their headquarters in Wan Chai. They asked for HK$100 million. However, I have already invited Sun Hung Kai Properties, Henderson Land Development, and New World Development. Although we have the ability to develop independently, we are not short of projects. Moreover, news has come from the Hong Kong government that the MTR Corporation will be tendering for the development above Central Station and Admiralty Station. I plan to focus my efforts on this project."

Chen Guangliang said with satisfaction, "Cooperation is not a problem. We have always been restrained in developing real estate, giving other real estate companies room to grow, so as to avoid people thinking that we are too monopolistic. In addition, the development rights above Central Station and Admiralty Station that you mentioned are indeed projects that we must acquire, and we will not give Jardine Matheson a chance."

"Okay. I'll let you know when I have more concrete information."

Chen Wenjie astutely observed that the government was now in favor of Chinese capital, so he immediately said, "Father, now that the ten-year period in mainland China has ended, could we also launch an acquisition of British capital? For example, the company Yingni in Qingzhou owns a large amount of land in Hung Hom that can be developed."

After receiving his father's plan for 'Hutchison Whampoa', his ambitions also grew slightly.

Chen Guangliang immediately said, "That's right. However, besides Hutchison Whampoa and Qingzhou Yingni being on Cheung Kong Group's list, Hong Kong Electric is also on Cheung Kong Group's list. In addition, Global Group is considering bringing some of its assets offshore, so Wharf Holdings is on its list. Therefore, we will explore these opportunities again at the beginning of next year and proceed in a unified manner to avoid alerting them."

"Ok"

Chen Wenjie rarely felt this way; his father was about to pull off something big. (End of Chapter)