Reborn as a tycoon in Hong Kong

Lin Baicheng, who returned to Xiangjiang at noon, first went home to rest for a while, and then went to Hutchison Whampoa after about two o'clock in the afternoon.

Today is Tuesday, but during the daytime on Monday in London, the international gold price rose above US$210/ounce. When the gold price reached US$213/ounce, Yuan Tianfan, who was in charge of trading in London, decided to sell long gold futures. At that time He got in touch with Lin Baicheng in Tokyo.

Lin Baicheng said that as long as the price of gold exceeds 210 US dollars per ounce, it can be sold, so he agreed with Yuan Tianfan to sell.

Hutchison Whampoa's operating capital is US$1.5 billion. Including profits, the total number of long orders is nearly US$2 billion. Although it is a lot, the trading volume of gold futures is very large, so all sales were slowly completed that day. Out, delivery and liquidation.

After the liquidation and settlement was completed, 20% of the investment profits were retained in London, and the rest was transferred to Hutchison Whampoa's company account through HSBC. The remaining 20% ​​is tax, but this 20% is not paid in full, but half, and the other half is avoided through investment.

In fact, if the capital is replaced by British capital, more tax can be avoided. However, Hutchison Whampoa is a company in Hong Kong after all, and the company's controller is still a Chinese. In corporate finance terms, if the company earns too much this time, it will definitely attract jealousy. If the tax avoidance exceeds half of the dividing line, it will definitely cause trouble. At that time, the company will face huge fines.

After Lin Baicheng learned about it, he asked the finance department to pay taxes on 10% of the profits, and the rest was kept in the account of the London branch, waiting for Watsons to be delisted, and then used to invest in the construction of large supermarkets in the UK.

After Lin Baicheng came to the company, he called Wei Li, Cheng Yufeng, Xia Boyin, and Wei Peter, the three vice presidents, to the office.

Secretary Chen Huixiang made coffee and tea and went out. There were only five of them in the office, Lin Baicheng.

Lin Baicheng said: "Wei Li, please tell us in detail about the company's profit from this investment."

Weili was prepared for this, so he responded: "The company's gold futures investment can be said to be divided into two times. The profit before this time was 125 million U.S. dollars. This time, the buying cost price is 163.6 U.S. dollars per ounce. The average selling price was US$214.4 per ounce, with a profit of a little more than 31.05%.”

“The company used leverage and operated US$1.5 billion, so after deducting handling fees, it made a profit of US$462 million. The company’s first profit was US$125 million, and when added together, the total profit was US$587 million. "

“Although a profit of US$587 million was made, the interest on financing leverage has to be paid every month. The US$750 million financing interest at the end of February has been paid for 5 months, and the US$750 million financing interest at the end of April has been paid for 3 months. moon."

"In this way, it is equivalent to paying US$750 million in financing interest for 8 months, and the annual interest rate of financing interest is 9%. Eight months is exactly three-quarters of the annual interest rate, which is 6.75% interest, 50 million A little more dollars.”

"After deducting interest, the company's total investment profit was US$537 million. Among them, 20% of the tax could not be brought back, so the profit the company brought back to Hong Kong was US$429.6 million, which is HK$1.804 billion when converted into Hong Kong dollars."

"Although a lot of taxes have been deducted, fortunately, taxes can be reduced through investment, so the actual tax deducted is only more than 50 million US dollars. The remaining 50 million US dollars will be sold after Watsons completes its delisting. The UK invests in large supermarkets. Because this fund is tax-related, the investment must be completed within the year to truly offset the tax."

"Very good! The profit of HK$1.8 billion is very good!"

Lin Baicheng was very happy after hearing this. Although he already knew that the company's profit this time would be more than 1.5 billion Hong Kong dollars, he was still very excited at this moment. Previously, the profit was a book profit, but now it is different. The profit of HK$1.8 billion has been transferred to the company's account.

"Mr. Lin, thanks to your keen eye, the company can achieve such high investment profits."

Cheng Yufeng praised him loudly. Although it sounded like flattery, his words were sincere. After all, in less than a year, he used 600 million Hong Kong dollars to make an extra profit of 1.8 billion Hong Kong dollars. How many people in this world can do this? to these.

Xia Boyin also said: "President Cheng is right. Thanks to Mr. Lin's leadership, the company has made huge profits. At the same time, the company's market value has exceeded 20 billion Hong Kong dollars, making it the largest listed company in Hong Kong today."

Not to be outdone, Peter Wei said: "Let alone 20 billion Hong Kong dollars, I believe that under the leadership of Mr. Lin, the company will reach 50 billion Hong Kong dollars in a few years, and the market value of 100 billion Hong Kong dollars will be a matter of time."

"Hahaha"

Lin Baicheng was very happy when he heard this. After laughing, he waved his hand and said: "Stop flattering me, let's talk about how to use this profit of 1.8 billion Hong Kong dollars."

Wei Li listened and said: "Mr. Lin, regarding the company's debt, before your acquisition, the company's short-term debt was HK$760 million and long-term debt was HK$570 million. However, as the company sold some unprofitable and less profitable assets, The company, the company's debt has been reduced, now short-term debt is HK$530 million, and long-term debt is HK$440 million, totaling debt of HK$970 million."

"However, after you acquired the company, Mr. Lin, you asked the company to borrow HK$500 million from HSBC. This money was used as the principal for investing in gold futures, so the company's total liabilities are HK$1.47 billion."

"In terms of debt, the short-term debt of 530 million Hong Kong dollars must be repaid by the end of the year. The shortest long-term debt must be repaid next year, and the longest long-term debt must be repaid the year after."

"Do you have any suggestions?"

Lin Baicheng did not express his thoughts immediately, but asked Wei Li and the others. He wanted to hear their thoughts first to see if they were the same as what he thought, and whether their thoughts would be better.

Wei Li is the president, and of course expressed his thoughts first: "This time the company made a profit of HK$1.8 billion, which is enough to pay off all finances, so except for the HK$500 million of HSBC's new loan, all other debts can be paid off at once. Now the company's market value exceeds HK$20 billion, which is a high-quality asset. After the debt is sorted out, as long as the company has funding needs, it can obtain more funds by re-loaning from banks or issuing bonds."

"If Mr. Lin has personal needs for the remaining funds of about 800 million Hong Kong dollars after paying off the loan, the company can distribute dividends. Mr. Lin can personally receive a dividend of 400 million Hong Kong dollars. The company's dividends do not need to pay taxes. Yes, Mr. Lin, you can get the money in full."

If possible, Wei Li, as the president of Hutchison Whampoa, hopes that all funds will remain in the company as development funds, but the shareholders' ideas are definitely different from the management's. He knows that shareholders prefer dividends and cash, so all he can do is Try to reduce the funds for dividends as much as possible and pay off the company's debt first.

Without the debt pressure of nearly 1 billion Hong Kong dollars, even if the company does not have a large amount of cash, it can still obtain the funds needed to develop the company through loans or bond issuances. The situation is not bad.