The birth of the Hong Kong Island family

Time flies and we arrive in 1982 in a blink of an eye.

After New Year's Day, Lin Zhichao came to work in the office of Changshi Group. He is now very relaxed at work, mainly because he is mentally relaxed - his sons can already stand alone.

Cheung Kong Group is still the flagship listed company of the Lin family. Even if the Hang Seng Index falls to 1,100 points, the company still has a market value of more than 24 billion.

Many investors know that Cheung Kong Group's profits last year were astronomical (from the sale of properties and stocks); at the same time, Cheung Kong Group's current liquidity is as high as 8.2 billion Hong Kong dollars (including 2.1 billion raised from rights issues).

After a while, Lin Ruihuan, Zhou Fuzhao, Mai Lisi and other core executives came to Lin Zhicheng's conference room. Everyone sat at the conference table to prepare for discussion.

At present, Cheung Kong Group basically holds a management meeting once a month, and nearly 20 senior executives will gather together. As for such a small high-level meeting, the core executives of the group were present, and everyone held the meeting in Lin Zhichao's office.

"Today we will discuss the bidding price of the Central Bus Terminal. Let us know what suggestions you have!" Lin Zhichao said relaxedly.

Why is he so relaxed?

First of all, the Lin Chichao family’s rent-collecting properties in Hong Kong are already huge, and they dominate even in Central (Admiralty is also Central).

Secondly, this bid, regardless of whether it is successful or not, is an ‘ideal result’. Winning the bid should be ideal; failing to win the bid would make Land Land even worse.

Finally, although Exchange Square is good at collecting rents, you can also invest in commercial real estate around the world.

Zhou Huaian said: "In the second half of last year, Hong Kong real estate has experienced adjustments and declines, and many properties have been unable to be sold. In fact, the reasonable price of this land should start with '4'."

The implication is that it is not worth HK$5 billion.

In the first half of last year, a piece of commercial land on Cottonwood Road, with only 14,000 square feet, was won by a foreign-funded consortium for HK$490 million through public bidding. The unit price was already as high as HK$350 million.

If the bus terminal does not exceed HK$5 billion, then it will not exceed this unit price; considering the superiority of the location and the much larger land area, this fully shows that the real estate has been adjusted a lot.

Lin Ruihuan thought for a while and said: "From the perspective of long-term interests, Hong Kong's real estate industry still has great prospects. Therefore, taking into account the 'adventurous' character of Land Bold, he may be very determined to defeat us and take the risk to pay a high price. . In particular, our Cheung Kong Group sent out a lot of smoke bombs last year, expressing its determination to acquire this land, and Bao Fuda may take a gamble."

He was a little confused as to why his father asked Zhou Huai'an to release some news - the land at the bus terminal was worth more than 8 billion, and Cheung Kong Group's cash flow was very sufficient. Isn't this news an obvious attempt to entice Land's chief executive, Pau Fuda, to join the bidding?

Unless he suddenly thought of a possibility, that is, his father wanted to drag down Land!

But if this is the case, Hong Kong real estate will have to plummet rather than adjust.

So, will Hong Kong real estate plummet?

No one could imagine Lin Zhichao’s true thoughts. After all, people with vision only know about the ‘real estate adjustment’ and would not have thought that the ‘Huaying Negotiations’ would start this year.

For example, Chen Qingsong and Bao Fuda at this time, although they also knew that real estate was in adjustment, they still held great hope that real estate would rise again.

Lin Zhichao asked: "How risky do you think Land will be?"

This is a psychological analysis!

Lin Ruihuan said: "I'm afraid it will cost more than 5.5 billion! If I were Land Group CEO Pau Fuda, then I would think that Cheung Kong Group must bid more than 5 billion. So if I want to beat Cheung Kong Group, I will definitely bid more than 5.7 billion. "

Lin Zhichao then said with a smile: "Then we will offer HK$5.7 billion!"

Everyone was surprised and couldn't figure out the boss's true purpose.

Of course, when everyone saw that their boss was so confident, they no longer paid attention to this issue.

Later, Lin Zhichao said: "Has the deal for the Hilton Hotel in Vancouver been completed?"

Zhou Fuzhao said: "All payments have been made and the transaction is completed."

Lin Zhichao nodded. Last year, Cheung Kong Group used loans to acquire the Hilton Hotel (ownership) in Vancouver for HK$600 million. It was considered a small overseas investment.

The rate of return from overseas hotels must be very low. However, Lin Zhichao also has his own considerations. The exchange rate between Hong Kong dollars and US dollars was only about 5.2 last year. If it is a loan, even if the interest is 18% (Cheung Kong Group can get lower interest), it is very cost-effective.

This is because the exchange rate of the Hong Kong dollar will reach 7.8 next year (1983). The depreciation of the Hong Kong dollar means that it is cost-effective to borrow now; not to mention, the prime interest rate will fall, and the interest will also fall according to the market situation, and it will not always be as high as 18% interest .

At this time, Cheung Kong Group's cash flow of HK$8.2 billion is fully US$1 billion (HK$5.6 billion). If this US$1 billion appreciates by HK$7.8 billion next year, it will be equivalent to a net profit of HK$2 billion.

The other side.

Newbijian and Bao Fuda were also in the office, discussing the pricing issue at the bus terminal.

Bao Fuda said: "Judging from Lin Zhichao's enthusiasm for rent-collecting properties and the comments made by Cheung Kong Group last year, they will definitely give a high price, which is expected to be between 5.5 and 5.7 billion Hong Kong dollars."

Newbijian frowned, and then said: "Real estate has entered a period of adjustment, and it has already begun to depreciate a lot in the second half of last year!"

Bao Fuda said: "It has indeed entered a period of adjustment, but it is only an adjustment. It is expected that it will be digested in one year and return to the upward channel. Furthermore, the news we have received is that the mainland government is not in a hurry to discuss the issue of Hong Kong's ownership, which shows that they Fear of offending the West again and being economically blocked by the West. In this case, the possibility of our UK renewing its contract with Hong Kong is very high."

After hearing this, Newbijian nodded and said, "I agree with your point of view. Hong Kong still has huge development potential!"

The two of them are very optimistic about Hong Kong's prospects. A large part of the reason is that since MacLehose visited the capital in 1979, the Hong Kong government has always conveyed an "optimistic" attitude, and the mainland government is not in a hurry to talk about Hong Kong's prospects. question. As a result, many businessmen feel that the mainland is "showing weakness" and Hong Kong may be "renewed."

Bao Fuda said: "Therefore, I suggest Land to bid at a price of HK$5.98 billion. The bid is hundreds of millions higher than the Cheung Kong Group. It will make up for the loss of the Victoria Harbor Center when the Keswick family was in power."

Newbijian said: "This price is very likely to win the bid. Even if we don't win the bid, we will lose unjustly. But in this way, Land's debt ratio will be very high."

Bao Fuda said: "As long as real estate returns to the upward trend, the debt ratio will naturally fall, and interest rates will also fall!"

yes!

As long as real estate rises, no matter how high the debt ratio is, there is no need to worry. This is probably the thinking of many "gambler" investors.

Ultimately, Newbijian agreed with Baofuda.

The two "foreign" Jardine family leaders are eager to make achievements so that they can prevent the Keswick family from regaining power. Because the Keswick family holds only a dozen percent of Jardine Matheson, the board of directors of Jardine Matheson has greater power.

In addition, the Wharf Group was lost at the hands of Newbijian. Although everyone on the board of directors knew that Newbikin could not be blamed for this, after all, this was a hole dug by the Keswick family.

But no matter what, Niubijian has been holding his breath, that is, to recover the losses caused by the loss of Wharf Group.

And Bao Fuda is a radical person who intends to show off his talents in the real estate class and impress everyone.

So since 1980, real estate investment has gradually spiraled out of control!

The consortium led by Edward Disney officially launched an acquisition of Disney Company. The acquisition method was to acquire no more than 25% of the stock at a premium of 31.2%.

The advisory representative for this acquisition is the investment business department of Chase Bank, including loans also through Chase Bank.

When the news came out, it caused quite a stir in the United States. The biggest reason was that ‘Audrey Company’ was the acquirer, and both Audrey Company and Disney Company were named after their founders.

Moreover, Audrey Hepburn’s identity has always attracted much attention.

The Disney Company.

Ronald questioned Edward who came and said, "You are acting traitorously. Do you want the words 'Audrey' to be placed on the name of 'Disney Company'?"

Although the Disney Company was run into a mess by him, his main business was declining, and there was no good return on real estate investment for the time being. However, Ronald did not think he had a big problem. Real estate had begun to appreciate in value, and traditional business had already begun to appreciate. It is already a sunset industry, and it is enough for Disney to simply collect copyright income.

Edward was already confident of victory at this time, and many shareholders had been convinced by him because everyone was dissatisfied with Ronald's performance.

So when faced with Ronald's questioning, he said calmly: "Audrey Company will maintain the independent operating nature of Disney. They are only the majority shareholder. In addition, Audrey Company supports Disney in rebuilding its creative department. And are willing to share resources, this is a very good opportunity for cooperation. Ronald, prepare to convene the board of directors, don't let Disney become a 'memorial hall', you have failed!"

Ronald was immediately speechless. Disney had indeed performed poorly in recent years, and he knew it; however, he preferred to rely on the appreciation of real estate to reverse the situation.

But the real estate he purchased was not in Manhattan, because the value of Manhattan office buildings has appreciated rapidly in recent years, while other places have been slow to respond.

According to the law, he must convene a board of directors and vote on the acquisition, and can also initiate a counter-takeover.

But in Disney's situation, he didn't know whether any consortium was willing to join the anti-takeover. Even if there were, it would be difficult to win against the powerful Audrey Company.

"I will convene a board of directors in accordance with the law! But I warn you, Audrey Company is not the best choice!" Ronald warned.

He doesn’t have any prejudice against Audrey’s company, but he feels that ‘Audrey’ is a personal name, and like ‘Disney’, it is a symbol of the two founders. If Disney was optimistic that day and turned into Audrey Land, wouldn’t that be a real misstep?

Then Edward had already been impressed by the young man Lin Ruidong. During this period, the two often met to discuss Disney's subsequent development. Edward often applauded Lin Ruidong's ideas.

For example, for the CEO of Disney, Lin Ruidong hopes to choose from the CEOs of the eight major Hollywood productions, because this will help Disney get out of the dilemma of insufficient creativity; for example, the establishment of "Touchstone Film Company" will allow Disney to further develop into the media field.

Therefore, Edward is now a staunch supporter of ‘Audrey Company’.

"You don't need to emphasize this! Audrey Company only exists as a major shareholder and will not interfere too much with Disney. After we succeed, we will select a suitable CEO."

Ronald suddenly had nothing to say and could only stop talking. He knew that he was at the Disney Company and had entered the countdown. He also knew that many directors and shareholders had turned to Edward.

In early February, the Hong Kong government announced that Land Corporation had won the bid for the bus terminus site for HK$5.98 billion, shocking the entire real estate industry.

Of course, Cheung Kong Group's price tag of HK$5.7 billion is somewhat surprising. After all, the third-placed Sun Hung Kai Group's price tag was only HK$4.52 billion.

The media quickly smelled something different and quickly wrote the headline of this bidding as "Land beats Cheung Kong Holdings" to gain sales.

Land Corporation.

Bao Fuda and Niubijian were caught up in excitement. Their biggest source of excitement was not winning the bid, but that the price of Cheung Kong Group was indeed as high as 5.7 billion. Then their actions will be viewed highly by the board of directors and shareholders.

After calming down, Bao Fuda said: "Landmark should strike while the iron is hot and further expand the company's operations!"

He is now - debt-free, and he is focused on completing the overtaking of Cheung Kong Group under his leadership.

Newbijian said calmly: "You mean to acquire Hong Kong Electric?"

Bao Fuda nodded and said: "Not only Hong Kong Electric, but also Hong Kong Telephone Company. Assuming that we do not launch 'Operation Daybreak', then Lin Zhichao will definitely not miss such a British-funded enterprise. Therefore, we must acquire it as soon as possible. After all, long-term The real group has huge cash flow."

Newbijian fell into thinking. Real Estate's debt was too high. If these two companies were acquired, the debt ratio would be as high as over 90%. Once an unforeseen danger occurs, Land will be plunged into an irreversible situation.

Seeing that Niubijian was still thinking, Bao Fuda said: "At this time, the mainland has opened up, and the situation in 1967 will no longer happen, so Hong Kong's prospects are very bright. And once the Cheung Kong Group acquires these two companies, then Land will be There is no possibility of transcendence.”

Surpassing Cheung Kong Group is their obsession.

Of course, this so-called transcendence only excludes Hutchison Whampoa. After all, there is also Jardine Matheson on the land.

Newbrickian said at this time: "In 1980, Land's profits were HK$510 million; in 1981, Land's profits soared to HK$860 million, and profits from property sales exceeded rents for the first time. What do you think of this year?"

In the past two years, under the leadership of Bao Fuda, Real Estate has strengthened its investment in real estate development (residential), so profits have surged.

Bao Fuda said: "Although real estate is adjusted this year, the impact will not be too great. I think it can stabilize at 800 million."

Although Hong Kong's real estate market is adjusting at this time, the decline is limited after all. Some rents have not been affected yet.

In fact, the profits of any company in Hong Kong this year (1982) will not fall significantly (small decline). The real decline will be next year (1983), when it will plummet. Of course, the worst one in 1984 was that it basically could not bear the fall. There is a wave of bankruptcies.

Niubijian thought that with a profit of 800 million a year, coupled with Land's own strength, he could acquire Hong Kong Electric and Hong Kong Telephone Company.

"Okay, I support the acquisition of these two 'cash cow' companies. These two businesses are very cost-effective anyway."

Cheung Kong Group.

Lin Zhichao also learned about the failed bid, and there was no displeasure on his face.

He has already thought of this result!

He thought that if he invested in the 'Bus Terminal' at a high price, it might be 6 billion. In this way, not only will his "famous reputation" be damaged, but it will also be detrimental to the later development of the Changshi Group.

Cheung Kong Group has won the ‘Bus Terminal’ for HKD 6 billion, which means it will need more than HKD 2.5 billion in construction costs, with a total investment of HKD 9 billion. In addition, the Yangtze River Plaza needs construction costs, which are also more than 2.5 billion.

These two projects alone meet the capital requirement of 11.5 billion.

More importantly, if Cheung Kong Group spends huge sums of money to win the Exchange Square, then it will have to compete with Hong Kong Land for the Hong Kong Electric Lighting Company.

Because this company is the asset Lin Zhichao needs!

If Land had not been dragged down by Exchange Square and subsequently acquired HK Electric, then Chi-chao Lam might have truly lost HK Electric. Because Land's debt was not high, it would have been unlikely to sell HK Electric.

Now he is selling Exchange Plaza to Land Corporation at a high price just to drag Land Land down.

Including Hong Kong Electric, he does not need to consider competing for it recently, because Land Company is already his "food in mouth" and can be eaten at any time in the future.

As for his current fate, there is absolutely no need to speculate on Hong Kong Electric's stock price. After all, the more expensive the real estate is, the less money it will have to sell it later.

Outside.

Although Lin Zhichao didn’t care about losing the ‘bus terminal’ land, the media joined in the fun.

Some people described Lin Zhichao as always being invincible, and this time he also sent out various signals that he was determined to win. But in the end, they never thought that Land would be bolder and more courageous! (End of chapter)