Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 204 Relocation (Seeking monthly votes, recommendations, and subscriptions!)
Although Bao Yugang spoke lightly, Chen Bingwen could still detect a hint of seriousness in his words.

He nodded and casually replied, "Sir Bao is right, cyclical fluctuations are the norm."

I studied some historical data and found that every shipping downturn is actually accompanied by new opportunities.

For example, companies that focus on specific routes and use more energy-efficient and high-performance ships tend to recover faster.

Some shipowners even take advantage of low asset prices to make contrarian investments in preparation for the next cycle.

Of course, this requires extremely accurate foresight and ample cash reserves.

He didn't mention "abandoning ships and landing," but instead approached the topic from the perspective of internal upgrades and cyclical investments within the shipping industry. This approach demonstrated the depth of his research without appearing overly adventurous or abrupt.

These words truly piqued Bao Yugang's interest.

Unlike most people who are either blindly pessimistic or blindly optimistic, Chen Bingwen mentioned "structural changes" and "contrarian investing," which coincided with some of his long-term thoughts.

"It seems that Mr. Chen has a very thorough understanding of cycles."

So, in your opinion, how long will this 'winter' last?
Where might the opportunity lie?

He began to see Chen Bingwen as someone with whom he could discuss issues, rather than simply someone to ask for advice.

Chen Bingwen knew that his initial goal had been achieved and that Bao Yugang had been attracted by his viewpoint.

"I think this adjustment may not be short-lived."

The high costs brought about by the oil crisis will continue to suppress demand. Opportunities may not lie in traditional tankers and bulk carriers, but in more efficient container ships, or niche areas such as liquefied gas carriers and chemical tankers.

Of course, the safest approach might be like what you did, Sir, to maintain liquidity and wait for the prices of certain quality assets to fall to sufficiently attractive levels, whether it's ships or other high-quality shipping-related assets.

Half of the capacity of Y.K. Pao's fleet consisted of oil tankers.

With the oil crisis and reduced demand for maritime trade, tankers have increasingly become a burden rather than an asset.

Although Chen Bingwen did not directly point out the truth, every word he said resonated with Bao Yugang.

He looked at Chen Bingwen deeply and nodded slowly: "Mr. Chen, your insights are more profound than those of many who have spent half their lives at sea."

Efficiency and specialization are indeed the future direction.

As for contrarian investing…” he paused, then said meaningfully, “That requires immense patience and courage, and even more so, the right timing.”

Chen Bingwen's words raised Bao Yugang's opinion of him even higher.

This young man can not only see the risks, but also the opportunities that arise from them, and even hints at the strategic transformation he is considering.

The focus is shifting from traditional oil tanker bulk cargo to more sophisticated and promising areas, and even gradually converting offshore assets into more stable land-based assets.

The conversation between the two gradually deepened from the initial probing to the strategic level, and the topics ranged from shipping to real estate, and then to the future economic landscape of Hong Kong Island.

Chen Bingwen always maintained a proper balance, listening more and speaking less, only expressing well-thought-out insights based on publicly available information at key points, which made Bao Yugang feel that he had unique vision and was steady.

After finishing the 18-hole game, the two rested on the clubhouse terrace. Bao Yugang took the initiative to ask, "Mr. Chen, you just mentioned real estate and the future landscape, you seemed quite confident?"

After considering for a moment, Chan Ping-man said, "Sir Pao, I am indeed confident in the long-term development of Hong Kong Island."

But confidence is not blind.

I believe that future growth may no longer be limited to traditional trade and entrepot trade, but will be more closely linked to the development of the inland regions.

Whoever can better grasp this connection will gain the upper hand in the future.

Like shipping, its ultimate purpose is to connect continents with the world.

Instead of directly mentioning any specific projects or suggestions, he put forward a grand and forward-looking concept, implying the importance of close ties with the mainland.

These words deeply moved Bao Yugang.

In recent years, he has also been thinking about the future of global shipping and how to integrate more closely with the mainland.

Chen Bingwen's words vaguely touched upon a vague but correct idea in his mind.

“Connecting the mainland with the world,” Bao Yugang repeated, nodding slowly. “Mr. Chen, many of your ideas have inspired me. If you have the chance in the future, please play ball with me more often.”

"must."

Near the end, Bao Yugang took the initiative to ask, "Mr. Chen, you invited me here today, I'm afraid it wasn't just to discuss shipping cycles, was it?"
"If there's anything you need to say, just say it."

Hearing what Bao Yugang said, Chen Bingwen did not hide anything and his expression became serious: "Sir Bao, to be honest, besides asking about shipping, I have another request."

"Oh? Please go on," Bao Yugang said noncommittally.

"It's about Hutchison Whampoa," Chen Bingwen said bluntly. "Sugarheart Capital currently holds 10.8% of Hutchison Whampoa's shares, making it a major shareholder."

But the key is HSBC's 33.65% stake.

I know HSBC is looking to dispose of this stake.

Bao Yugang nodded; this was no secret in the top circles.

Chen Bingwen continued, "I heard that HSBC is more interested in Mr. Li of Cheung Kong Holdings."

However, I believe that Sugar Heart Capital is also a serious and capable potential buyer.

We have a strong foundation in the food and beverage and retail sectors, and there will be huge synergies with Hutchison Whampoa's Junyi Warehouse and even port logistics in the future.

"We are optimistic about Hong Kong Island's long-term future and are willing to make long-term strategic investments, not just financial ones." He paused, observing Bao Yugang's reaction, and then said sincerely, "I know that Sir Bao, you hold a very important position on the HSBC board and have a close personal relationship with Sir Michael Sandberg. I don't dare to ask you to explicitly support anyone, but I only hope that if the HSBC board discusses this matter, you can give us a fair chance to compete based on business logic and what is most beneficial to Hutchison Whampoa."

Chen Bingwen's words not only demonstrated his intentions and strength, but also showed great respect for Bao Yugang, not asking him to take sides, but only requesting a "fair opportunity".

Chen Bingwen's words silenced Bao Yugang.

He appreciates Chen Bingwen's directness and honesty, and also recognizes the strength and ideas he has demonstrated.

Compared to Li Jiacheng's composure and experience, Chen Bingwen is more like a sharp sword with its edge fully exposed, full of aggression and limitless possibilities.

HSBC's choice certainly requires more careful consideration.

After a moment, he raised his head, looked at Chen Bingwen, and slowly said, "Mr. Chen, I understand what you mean."

When HSBC disposes of assets, it will naturally do so from the perspective of maximizing its commercial interests.

The participation of powerful buyers may not necessarily be a bad thing for HSBC and other shareholders of Hutchison Whampoa.

Sir Michael Sandberg is a professional banker; he will make judgments that best serve HSBC's interests.

These words sounded like official rhetoric, but Chen Bingwen understood the implied meaning.

At least Bao Yugang doesn't object to his participation, which is already a positive sign.

"With Sir John Paul's words, I feel relieved."

Thank you so much!"

After seeing Bao Yugang off, Chen Bingwen sat in the car on his way back to the company, closing his eyes to rest.

The meeting with Y.K. Pao initially achieved the desired effect. Regardless of whether it was successful or not, it at least planted a seed in the mind of this HSBC director.

Next, he must accelerate the integration of Qingzhou Yingni and build it into a solid rear base and a platform for future capital operations.

After all, Qingzhou Yingni is a listed company, and it needs to make a big move to increase its market value.

A few days later, the new board meeting of Qingzhou Yingni was held in the company's conference room in Hung Hom.

Chen Bingwen was successfully elected as chairman of the board of directors. Fang Wenshan, Ling Peiyi, Gu Yongxian, the former chief financial officer of the company, and an independent director formed the new board of directors.

After the meeting, accompanied by Fang Wenshan and others, Chen Bingwen personally inspected the cement plant of Qingzhou Yingni in Hung Hom and the Heyuan Street plot.

The cement plant was old and dilapidated, with machines roaring and dust filling the air.

Looking at this industrial zone occupying a prime coastal location, Chen Bingwen pondered its future value.

"How big is this piece of land?" Chen Bingwen asked.

"Including the factory area and warehouses, it covers approximately 5.2 hectares (about 56 square feet)."

Fang Wenshan replied, "The property rights of these lands are very clear, but the land is designated for industrial use."

Chen Bingwen nodded, his gaze sweeping over the surrounding environment.

This location is excellent, being close to the future Hung Hom Cross-Harbour Tunnel exit, but it is occupied by old industrial areas and its value is severely underestimated.

"How are the cement plant's production capacity and profitability?" he asked the cement plant manager who was accompanying him.

"Chairman, to be honest, it's not ideal."

The factory manager, a middle-aged man in his forties, answered somewhat hesitantly when Chen Bingwen asked him a question, "The equipment is old, consumes a lot of energy, and causes a lot of pollution, which has led to many complaints from nearby residents."

Production costs are significantly higher than those of newly established, modern cement plants. The cement market is currently highly competitive, with very thin profit margins; they are barely breaking even.

Chen Bingwen understood.

The greatest value of this land lies in the land itself, not in the cement business on it.

Back in the company's conference room, Chen Bingwen immediately convened a strategic meeting.

“This land in Hung Hom can no longer be used for cement production.”

Chen Bingwen made a direct decision: "The value is completely unequal."

The factory must be relocated as soon as possible, and the land must be redeveloped.

"Where to relocate to?" Fang Wenshan asked.

"Tuen Mun." Chen Bingwen had already decided. "There are existing industrial zones in Tuen Mun, and the land prices are much cheaper."

Moreover, its proximity to the dock makes raw material transportation convenient.

We'll buy a piece of land there and start the latest dry-process cement production line. It's highly efficient, produces less pollution, and can significantly reduce costs.

Sell ​​the old factory's equipment that can be sold, and discard the rest.

Moreover, relocation also brings relocation compensation and land price differences, which can partially cover the investment in the new production line.

"Mr. Chen, if this land is converted entirely into commercial land, according to the Hong Kong government's Town Planning Board's calculations, the land premium alone could amount to HK$1.8 million to HK$2.2 million."

This is just the land price; it doesn't include any development and construction costs.

Fang Wenshan whispered a reminder to Chen Bingwen.

(End of this chapter)