Reborn as a tycoon in Hong Kong

HSBC.

On this day, Wei Li, the chief executive officer of Hutchison Whampoa, and Cheng Yufeng came to visit Mr. Shen Zhou, the chief executive officer of HSBC.

This visit had been contacted in advance, so Shen Zhou personally entertained the two of them in the office.

The three of them were polite at first, and then Wei Li and Cheng Yufeng explained their intention.

“Hutchison Whampoa would like a loan?”

Shen Chow couldn't help but be a little surprised when he learned that Hutchison Whampoa wanted to borrow a sum of money from HSBC.

"Yes."

Wei Li nodded and said: "The company currently needs a sum of funds. Hutchison Whampoa and HSBC have many cooperations, so we first thought of HSBC. We also hope that Shen Daban can provide certain discounts in terms of interest."

"HSBC has always offered the lowest interest rates to Hutchison Whampoa."

Shen Porridge said something, and then asked: "I wonder how much loan Hutchison Whampoa needs this time?"

"One hundred million dollars!"

Wei Li said aloud.

“Does the loan require U.S. dollars?”

Shen Zong was moved when he heard this. The exchange rate between US dollars and Hong Kong dollars is about 1:4.2. Large-scale corporate loans are usually round numbers, either 400 million Hong Kong dollars or 500 million Hong Kong dollars. It is rare to loan an amount like 420 million Hong Kong dollars, so he There is such a question.

Weili nodded: "Yes, we need US dollars."

Shen Porridge asked: "One hundred million US dollars is not a small amount. Forgive me for being curious, but I wonder what Hutchison Whampoa is going to use this fund for?"

Wei Li answered aloud: "There is nothing that cannot be said. Hutchison Whampoa has an investment in the United States that requires funds, and it is preparing to open up the market there, so it requires a large amount of funds."

"Investment? What kind of investment is it?"

Shen Porridge asked again, but he couldn't help but feel a little doubtful.

"It is to participate in the financing of a company and the company's business operations."

This time it was Cheng Yufeng who answered.

"Is that so? It seems that Hutchison's business is getting bigger and bigger now."

Shen Porridge laughed, and did not ask any more questions, but said: "One hundred million US dollars is not a small amount after all. I need to hold a meeting to discuss it. After all, I am not the only one who has the final say in the bank. At the same time, Hutchison Whampoa must also be prepared. Only collateral of corresponding value will do. It will take some time to hold a meeting to discuss, but I will give you an answer as soon as possible."

Wei Li said aloud: "Hutchison has prepared the collateral, so Mr. Shen doesn't have to worry about this."

Shen Porridge said to the two of them: "Hutchison Whampoa currently has a loan of more than HK$2 billion for property investment. The remaining loans add up to nearly HK$2 billion. Counting the current loan of US$100 million, that is up to HK$200 million." More than HK$50 million. Based on Hutchison Whampoa’s current net assets of more than HK$5 billion, a debt ratio of almost 40% is already quite high, which will inevitably affect Hutchison Whampoa’s future loans.”

"Although Hutchison Whampoa's debt ratio is high, its profitability is not bad."

Wei Li replied and said: "Currently, the real estate prices in Xiangjiang are constantly rising, and one of Hutchison Whampoa's main businesses is real estate. The rising real estate prices have benefited Hutchison Whampoa a lot. Then there is the property investment that Shen Daban just mentioned. That piece of property, Hutchison Whampoa invested more than HK$2 billion in September last year, has increased in value by nearly 50% based on today's property prices, and the asset value has increased by about HK$1 billion."

"Once necessary, Hutchison Whampoa can choose to sell these investment properties, which will not only bring huge profits to Hutchison Whampoa, but also reduce Hutchison Whampoa's asset-liability ratio. It can be said that it kills two birds with one stone."

What Weili said about Hutchison Whampoa's investment in real estate was not a secret to the outside world, especially HSBC, which was responsible for providing most of the loans, so Weili said it directly without any psychological pressure.

Shen Porridge said with a smile: "HSBC has never doubted Hutchison Whampoa's ability to repay debts. If Hutchison Whampoa still needs loans in the future, HSBC will open its door at any time."

“Thank you HSBC for supporting Hutchison Whampoa.”

Wei Li thanked him aloud, but he knew very well that Hutchison Whampoa could get the loan only if there were no problems with the company's operations. Once the company did have trouble, it would be great if HSBC could not add help in the nick of time and avoid adding insult to injury.

Banks give out umbrellas on sunny days and take away umbrellas on rainy days. This is not just a talk, but it has always been done.

Shen Zong said: "It won't be too late to discuss the details of the loan after I have a meeting here to make a decision."

"I'm sorry for bothering you, Boss Shen."

Weili said politely.

After the matter was settled, Wei Li and Cheng Yufeng did not stay at Huifeng longer and said goodbye to Shen Zhou.

Shen Porridge did not persuade the two of them to stay. After sending them out of the office, he called the secretary outside.

"Have someone check to see if Hutchison Whampoa has made any recent investments in the United States, or if it has any business expansion there that requires large sums of capital."

"Yes, Taipan, I'll have someone check it out right away."

"Do this secretly. Don't let Hutchison Whampoa notice it. You only have two days at most."

"I see."

"Well, you go make arrangements."

Shen Porridge sent the secretary out and fell into deep thought.

Hutchison Whampoa suddenly came to borrow 100 million U.S. dollars. The reason why Shen Zhou wanted to find out where Hutchison Whampoa's funds would be used was because he suddenly wondered if there was something wrong with Hutchison Whampoa's 200 million U.S. dollar investment. He needed to Security deposit.

Shen Zong clearly remembers that when Hutchison Whampoa's gold futures investment was transferred, the international gold price was around 250 US dollars per ounce. If Hutchison Whampoa was shorting near this price, the loss would be about 16% if it rose to the current price. Hutchison Whampoa's investment used five times leverage, so the loss was as high as 80%, and there was not much left of the US$200 million.

Today, the international gold price is around US$290/ounce, and it is entirely possible for it to rise to US$300/ounce. As a result, Hutchison Whampoa, which is short-selling, can only choose to replenish its margin as long as it does not want to liquidate its position and admit defeat.

When you think about it this way, it makes sense that Hutchison Whampoa suddenly needs a $100 million loan.

Of course, all of this was just Shen Chou's sudden idea, and there was no real evidence, so Shen Chow asked his secretary to arrange for someone to investigate to see if Hutchison Whampoa's investment and business development in the United States were indeed legitimate. thing.

Now HSBC holds more than one billion Hong Kong dollars in Hutchison Whampoa stock. If Hutchison Whampoa's investment is not a profit but a huge loss, then when the truth cannot be concealed, Hutchison Whampoa will inevitably explode, and HSBC's investment will inevitably appear. Huge losses.

Therefore, HSBC must get off the ship before there is the possibility of huge losses.

Of course, these are just Shen Chou's suspicions now, and it's still too early to jump ship.

Due to the time difference between the two places, Cheng Yufeng contacted Los Angeles at home in the evening. It was still early morning in Los Angeles where Lin Baicheng was located.

"Mr. Lin, today I went to HSBC with Mr. Weili and talked to Mr. Shen about the loan. Although Mr. Shen said that it would take some time to hold a meeting to discuss, there should be no problem with the loan."

"Well, as long as there is no problem. Except for part of the funds obtained from this loan, which will be used to participate in the financing of New Century Software Company, the rest will be used for the expansion and development of Watsons in the United States. I hope that Watsons, which you are responsible for, Yufeng, can The United States will make a difference."

Hutchison Whampoa's participation in the financing of New Century Software Company actually does not cost much. After all, the current valuation of New Century Software Company is not too high. At the same time, Hutchison Whampoa's share of financing will not be too large. The loan of US$100 million is even more Most of them are used by Watsons to open supermarkets in the United States.

The United States can now be said to be the largest market in the world. Watsons has no reason to ignore this market. With the presence of the future giant Wal-Mart, Lin Baicheng feels that it is necessary for Watsons to develop in the United States first. Even if it cannot gain a foothold in the United States, it would be good to slow down Wal-Mart's expansion and allow Watsons more time to expand in Southeast Asia and Europe.

Of course, Lin Baicheng still hopes that Watsons can gain a firm foothold in the United States. As long as it can capture a small part of the market, it will be a good thing for the valuation of Watsons and Hutchison Whampoa.

"Don't worry, Mr. Lin, Watsons has accumulated a lot of experience in supermarket operations. There are also many supermarkets in the UK. We will first open a large supermarket in Los Angeles to accumulate experience, and then slowly expand, focusing on steady and steady operations."

"Just know how to play it slow and steady. You have to remember that this is the United States. Be careful of local competitors such as Wal-Mart."

"Don't worry, we have encountered some small tricks in the expansion of Watsons, and we have prepared and responded to them."

"Since you said that, I have nothing to remind you, just do your best."

Lin Baicheng paused as he spoke, and then said: "Yu Feng, do your best at Hutchison, try your best to achieve results, and handle interpersonal relationships well. Wei Li will only be at Hutchison for one or two years at most. I hope to When the time comes to arrange for you to take over, everyone will have nothing to say."

"I understand what you mean, and I won't let you down."

Cheng Yufeng said solemnly, feeling a little excited. After all, this is Hutchison Whampoa's senior position and the head of a group company with a market value of more than 20 billion Hong Kong dollars.

"I'll see."

The reason why Lin Baicheng made it so clear to Cheng Yufeng was because the two of them would become a family in the future, and Cheng Yufeng would soon become his brother-in-law.

Once Cheng Yufeng became Lin Baicheng's brother-in-law, Lin Baicheng would of course prefer Cheng Yufeng to manage the Hutchison Whampoa Group if Cheng Yufeng was not bad at it. Sometimes nepotism is not a bad thing.

After finishing the call with Cheng Yufeng, Lin Baicheng set his sights on the financing of New Century Software Company.

Although Lin Baicheng did not take over this matter personally, Isabella, who was in charge of this matter, would report to Lin Baicheng once there was any progress.

At present, all institutions invited to participate in the financing of New Century Software Company have completed due diligence on New Century Software Company, and everyone has a clearer understanding of this company.

After completing due diligence, institutions that want to participate in financing will communicate with New Century Software Company, and both parties will negotiate on the company's valuation, not giving in, and striving for their own interests as much as possible.

In 1978, New Century Software's revenue was $61.5 million and net profit was $39.3 million.

Although this is the annual revenue and profit of New Century Software Company in 1978, New Century Software Company's office software business really started to be sold in July 1978, which means that sales only started in the second half of the year.

It is also July now, and New Century Software Company's statements are as of June this year, which is exactly half a year. Adding the half year of last year, it is exactly a full year.

Let’s start with the first half of this year. New Century Software’s revenue in the United States increased by about 13% compared to the second half of last year, reaching $69.5 million. As for profits, they grew 15% to $45.2 million.

This is the revenue and profit in the U.S. market in the first half of this year. New Century Software has also opened up foreign markets this year, but the revenue and profit are limited. After deducting operating costs, it is only more than one million US dollars for the time being.

After one year, New Century Software's annual net profit is about US$85 million.

In fact, New Century Software Company does not spend much money. In addition to developing database software, it spent about 20 million US dollars on office buildings.

Today, New Century Software Company still has tens of millions of dollars in cash in its account. The reason why it chose New Century Software Company for financing even though it was not short of money is because New Century Software Company makes personal computer operating systems. Finally, there will be two big investors.

There are two more major investors, and the U.S. office software market is almost fully developed. Currently, less than half of the market has not been captured, and there will not be much revenue in the future. Therefore, sooner or later, financing will be needed, so it is better to take advantage of the current good business of the company. financing in case.

Currently, there are major differences in valuation negotiations between financing institutions and New Century Software.

Financing institutions believe that the market potential of office software is limited, and has been almost fully developed by New Century Software Company. There is currently no good performance in the international market, so the market value of New Century Software Company cannot be simply calculated based on a price-to-earnings ratio of ten times profit, which is US$350 million. This is the reasonable valuation of software companies in the new century.

Isabella, who negotiated financing on behalf of New Century Software Company, of course held the opposite opinion. She believed that the international market alone was several times that of the United States and could create profits of no less than 200 million US dollars for New Century Software Company in the future, not to mention the computer market every year. Still growing, New Century Software's current valuation of $700 million is quite reasonable.

Both parties unanimously ignored the database and personal computer operating system businesses, because both businesses are still in research and development, the investment is not large, and there is no return, so they have little impact on the current valuation of New Century Software Company.

The valuation gap between the two parties is doubled. It can be said that the difference is a bit much. Fortunately, the institutions interested in participating in financing have not retreated because of this, and the two parties are still negotiating the valuation.

This kind of negotiation will definitely not be concluded in a short time. Fortunately, both parties are not in a hurry and decided to talk slowly.

New Century Software currently has tens of millions of dollars in its account. The company's funds are fully sufficient to support the research and development of databases and personal computer operating systems, so the company is not so urgent about financing.

However, he is not in a hurry. Lin Baicheng is still very concerned about financing. If Isabella cannot handle it properly, he will intervene in the matter.