The birth of the Hong Kong Island family

It’s a new year again (1994).

In the 'Chairman's Office' on the top floor of the Yangtze River Group Center, Lin Zhichao stood in front of the window, overlooking the bustling scenery outside, with a feeling of pride in his heart.

Hong Kong is what it is today, and he personally contributed a lot, at least 15%.

Last year, Hong Kong's GDP reached HK$1.12 trillion, with per capita of HK$186,800, and its total foreign trade for the year was HK$2.56 trillion. Foreign exchange reserves are 485 billion Hong Kong dollars, ranking 7th in the world and 2nd in the world per capita. (Singapore’s foreign exchange is 48.1 billion U.S. dollars, and its population is only 3.31 million; Hong Kong’s foreign exchange is 62.1 billion U.S. dollars, and its population is 6.02 million)

It's like his own child. Now that he has grown up, Lin Zhichao is very proud in his heart.

The economy of Hong Kong in this life is at least 15% higher than that of the same period in the previous life; and in the future, it may be more than 20% higher, or even 30% higher.

In the past forty years or so, at most, the manufacturing and shipping industries brought changes to Hong Kong; in the future, the changes brought to Hong Kong by the cultural industry and technology industry will be huge.

In particular, the ‘cultural industry’ is basically ‘a sure thing’ and is already beginning to change everything in Hong Kong. The "cultural industry powers" of later generations basically account for more than 10% of the country's GDP, and the United States accounts for 30% (statistical methods may be different).

Hong Kong’s ‘technology industry’ is also developing better than in previous generations. The Polytechnic University was launched 12 years ahead of schedule, and the Cheung Kong Industrial Group has been investing and playing a big leading role.

After a while, Lin Ruihuan came to the office and reported to Lin Zhichao.

From 1992 to 1993, it was a two-year period when Cheung Kong Group invested heavily, and the investment focused on the mainland and the United States.

There is no need to say more about the mainland. Lin Zhichao has been crazy about projects in the past two years. Cheung Kong Group alone has invested more than 10 billion US dollars (total project investment * Cheung Kong shares); its subsidiaries Hutchison Whampoa and Hong Kong Electric have also They have also entered the mainland, including sister companies such as Wharf Group and Shangri-La Hotels and Resorts. According to preliminary statistics, Lin family-affiliated companies have invested more than US$30 billion in the mainland.

The influence of the Lin Zhichao family in the mainland can be proved by telling side stories - they are interviewed by the boss at least four times a year and ten times by the boss. They are evaluated as 'bold and knowledgeable' and 'true patriotic businessmen' , 'Concerns and supporters of domestic education and public welfare undertakings'.

As for the United States, the investment is divided into two parts: one is the establishment of a REITs (real estate trust fund), with a raised capital of US$1 billion, mainly investing in Manhattan office buildings; the other is the branch investment established by the Changshi Group, totaling Invested US$4 billion to purchase Manhattan office buildings, New York shopping malls, commercial real estate in Los Angeles and San Francisco, etc.

Cheung Kong Group dares to make such a large investment, naturally because it already has a cash flow of 6 to 7 billion US dollars, plus the current best interest rate is only 7 to 8%.

Some "development real estate projects" in the Mainland have loan rates as high as 80% to 90%, and you need to put out 10 to 20% of the capital to start. Because the development of real estate projects itself pays back quickly, there is no need to invest too much.

"Last year's profit has been preliminary calculated, and it was about 13.5 to 14 billion, of which the profit from Hong Kong's property sales was 6.5 billion, accounting for nearly half; Hong Kong's rental profit was 4 billion, and the profit from overseas profits and other businesses was 30 Over 100 million." Lin Ruihuan happily reported.

Last year was another great year!

Cheung Kong Group jointly owns three Raffles City malls in Japan and two comprehensive shopping malls (hotels, office buildings, shopping malls) in Singapore, all of which have good profits; other fields-infrastructure (Jingzhou Yingni, early Investments in infrastructure, retail (global 7-11 convenience stores), hard food and other businesses in the mainland can all create considerable profits.

Lin Zhichao said: "The profits from Hong Kong, Japan, and Singapore are the backing for our investment in the mainland, the United States, and the United Kingdom; and investment in the mainland, the United States, and the United Kingdom, I believe that in a few years, there will be a steady stream of profits."

Lin Ruihuan said: "Dad, the group's debt is a bit high now. Should we sell the shopping malls in Laguna City and Huijing Garden to reduce the debt?"

Lin Zhichao said with satisfaction: "I am very pleased that you think so. There is no problem with your decision. However, I hope to wait. This is my personal opinion."

Lin Ruihuan nodded and said, "I understand, then let's follow Dad's idea. In fact, Changshi's debt ratio is not high, but we rarely have that much debt."

Cheung Kong's debt has always been frighteningly low. Today, the debt is around HK$15 billion. Although it is a new high, the actual asset value of Cheung Kong is over 200 billion, and its debt ratio is less than 10%.

Lin Ruihuan wants to sell shopping malls in two large housing estates. This is similar to Lin Zhichao's idea. Except for commercial properties in non-core business areas, all commercial properties can be sold. The only difference in his thinking is that Lin Zhichao plans to start selling at the end of 1996.

Then, Lin Ruihuan said: "The profits of Hutchison Whampoa and Hong Kong Electric last year can also be roughly calculated. They were 8.5 billion and 4.6 billion Hong Kong dollars respectively. The total profit of Cheung Kong Holdings last year was about 3.5 billion US dollars."

A good harvest year!

At the same time in the previous life, the profit of the Cheung Kong Department Store exceeded US$2.8 billion until 1994.

By next year, the Changshi Group led by Lin Zhichao is expected to have a profit of US$4 billion, a full 40% increase.

This is due to Cheung Kong Group’s “global commercial real estate layout” and “comprehensive development” led by Lin Zhichao, Hutchison Whampoa’s “rapid development of the retail industry” and “more investments involved”, and Hong Kong Electric has also made a lot of progress.

To put it simply, it is like Hutchison Whampoa having an additional $1 billion in investment capital in the 1980s. If this $1 billion is invested, it will naturally have a greater effect.

In fact, Lin Zhichao's Victoria Harbor Real Estate has not yet been listed on the market. This private company also owns a lot of rent-collecting properties, so of course it will not be listed on the market.

In late January, the American "Fortune" magazine published a list of the world's richest people. Lin Chichao from Hong Kong became the "world's richest man" for the first time with a net worth of US$12.5 billion.

The article introduces:

Last year (1993), the share prices of two listed companies under Lin Zhichao, Cheung Kong Group and Wharf Group, rose by about 40%. Cheung Kong Group's current market value is HK$186 billion, Wharf Group's market value is HK$66 billion, and the two Hutchison Group's market values ​​are HK$25.2 billion. billion Hong Kong dollars; assuming that Lin Zhichao holds 41~42% of the shares (only counting the father and son trust companies, excluding the Lin Zhichao Foundation), he has a wealth of 100 billion Hong Kong dollars.

At the same time, as Japanese real estate plummeted (Tokyo is still the most expensive in the world), second-placed Yoshiaki Tsutsumi only had a fortune of US$9 billion.

Yoshiaki Tsutsumi was the richest man in the world from 1987 to 1990. Another Japanese real estate tycoon, Taiyoshiro Mori, was the richest man in the world from 1991 to 1992, with a net worth of US$12.5 billion. When Yoshiaki Tsutsumi returned to being the richest man in the world in 1993, his net worth was only US$9.5 billion. With a net worth of US dollars, Lin Zhichao’s net worth was ranked second in the world at that time.

By January this year, the Hang Seng Index had reached more than 12,000 points, and Lin Zhichao's net worth naturally soared.

In fact, if he had not donated one-third of his net worth to the Lin Chi Chiu Foundation a few years ago, he would have been the richest man in the world as early as 1993.

The ‘Lin Chi-chao Foundation’ is theoretically a public company, so it is not counted in Lin Chi-chao’s wealth, although it owns 20 to 21% of the shares of Cheung Kong and Wharf.

As for Lin Zhichao's unlisted companies, since they do not need to disclose financial reports, they will naturally not be included in the wealth list. Hutchison Whampoa, Hong Kong Electric, Singapore Land, etc., these companies are descendant companies and will not be counted in the Lin family wealth; of course, the value of these companies is also reflected in the market value of Cheung Kong Group and Wharf Group inside.

Lin Zhichao's title as the 'World's Richest Man' means that the Chinese people are proud and proud, and it has greatly boosted the morale of the Chinese people. Therefore, a group of Hong Kong's richest people held a banquet at the Shangri-La Hotel to entertain the protagonist Lin Zhichao.

"Lin Sheng, congratulations!"

"Lin Sheng, the world's richest man is so powerful that he greatly boosts the morale of our Chinese businessmen!"

In the box, all the rich people congratulated him.

The rich people who came today are the ones who control the economic context of Hong Kong. Although our companies have various competitions, they are all friends in private.

Lin Zhichao said with a smile: "Everyone has benefited from the appreciation of Hong Kong real estate; the mainland has reopened, and we have also increased investment channels. So, everyone is happy and congratulations!"

"That makes sense!"

"Same joy and congratulations"

For a while, everyone exchanged cups and cups. There were two tables in total, and everyone was chatting and laughing.

Including Cheng Yutong, Lee Shau Kee, Kwok Bingxiang, Li Jiacheng, Chen Qizong, Tang Youqian, Run Run Shaw, Kwok Hoonian, Yong Zhijian, Huang Tingfang, Li Gaofu, Feiping Tai, Stanley Ho, Wu Yingxiang, etc., these rich people represent Hong Kong's top plutocrats.

Lin Zhichao has always been regarded by the outside world as the "leader" and the "handsome tiger" in the real estate industry!

The market value of the top ten real estate companies in Hong Kong (Cheung Kong, Wharf, New World Development, Sun Hung Kai, Land, Henderson, Hang Lung, Wheelock (after merger), Oriental Group, Hopewell Properties) accounts for 85% of the total market value of Hong Kong real estate companies. %, accounting for 30~35% of the total market value of the Hong Kong stock market.

Forming a highly monopolistic ‘interest group’!

Cheung Kong, Sun Hung Kai, and Henderson, three real estate companies, account for nearly 60% of Hong Kong's annual sales, which are 6,000, 5,000, and 4,000 residential units respectively, totaling about 15,000 residential units, while Hong Kong's average annual supply is about 26,000 units. .

The fourth place Wheelock (renamed after merging with CK Hutchison Properties, Li Jiacheng's company) supplies 1,500 units, the fifth place Hang Lung supplies about 1,000 units, the sixth place New World Development only supplies 800 units, and the seventh place after that. No more than 500.

There are 4,000 real estate companies in Hong Kong, but there are only a few that are actually engaged in developing real estate. The main reason is that land is too expensive.

The "top ten real estate companies" such as Hang Lung, New World, and Oriental Group are all increasing the proportion of "commercial real estate". However, the Li family's capital base is not strong enough, and it has no financial resources after acquiring Wheelock.

The high market value of Cheung Kong Group is due to factors such as real estate development, commercial real estate, comprehensive investment, and overseas investment ideals. It is far from being comparable to other companies.

During the banquet, Zheng Yutong said: "Last year, the Hong Kong government's annual revenue from land sales and land premium due to change of use reached HK$45 billion, plus property-related income, such as rates, local taxes, stamp duties, real estate company profits tax, etc. , accounting for almost 70% of the Hong Kong government’s total revenue.”

Lee Shau-kee nodded and said: "So, too much control will cause a depression in the property market. It is not just our real estate companies that will be affected. The Hong Kong government does not have enough fiscal revenue, so how can it invest in public facilities."

Major real estate developers have recognized this point of view. In this regard, everyone is united.

In February last year, a spokesman for the Hong Kong Real Estate Chamber of Commerce paid a visit to the Financial Secretary and expressed his concerns. Afterwards, everyone started to take out 70% of their own mortgages, so house prices rose by 30% to 40% throughout the year. At present, the unit price of small and medium-sized residential units (under 1,000 square feet) in Hong Kong has risen to HK$5,000 per square foot.

In other words, one square meter costs about 50,000 Hong Kong dollars, and the salary of a graduate in Hong Kong is about 12,000 Hong Kong dollars. It would take 4 months without food or drink to afford one square meter.

To be honest, Lin Zhichao was a little scared and felt that the price was a bit high. However, as a real estate developer, "Shuai Hu", he must be on the same front as everyone else, otherwise he will have no friends in the future.

Lin Zhichao said: "It is said that HSBC and Hang Seng are formulating the matter of 'tightening' mortgage loans! And the Hong Kong government will probably enact more control regulations this year."

Everyone became serious, but today was a public banquet after all, so everyone wouldn't talk in detail.

Zheng Yutong said: "The fundamental solution is to increase the supply of land. This voice has now been accepted by more and more people."

Everyone agrees with this point of view!

The Hong Kong government has always been ambivalent about releasing Crown land into the market. A substantial increase in land supply will help stabilize land and property prices. However, in this way, the Hong Kong government's land will not be able to be sold at a high price, which will definitely reduce fiscal revenue.

What the Hong Kong government hopes is to wait until the price is high before putting it on the market!

Short supply and fierce speculation have become a pair of weirdos. On the one hand, the shortage of supply in the market has led to intense speculation; on the other hand, the intense speculation has led to an increase in vacant units, which has further exacerbated the situation of shortage of supply in the market, forming a vicious cycle that has caused the property market to rise continuously.

Public opinion has become favorable to real estate developers!

If any media interviews real estate developers now, they will definitely say that they hope the Hong Kong government can find a "fundamental solution" to curb property prices, which is to increase land supply.

If you used to criticize real estate developers, public opinion might turn into criticizing the Hong Kong government!

Lin Zhichao's becoming the "world's richest man" was widely spread in the Hong Kong media and caused huge discussion.

Some media pointed out that if Lin Zhichao did not donate one-third of his "net worth," his wealth would reach more than 18 billion U.S. dollars, setting a new historical record.

Some people also feel that although the Lin Zhichao Foundation is a charity in name only, since it can only use dividends and profits, but not principal, it is equivalent to an heirloom of the Lin family. After all, Lin Zhichao’s family controls the ‘Lin Zhichao Foundation’.

at the same time.

The public opinion war between real estate developers and the Hong Kong government has begun again!

This time, it has turned out to be beneficial to real estate developers, and the direction of public opinion has become that "the Hong Kong government will not increase land supply," which is the fundamental reason for the rise in property prices.

You know, the middle class in Hong Kong actually belongs to real estate developers, and there are about 500,000 of them. These people own properties and naturally don’t want them to fall, and they have families behind them!

Therefore, real estate developers are not alone!

Public opinion has turned in favor of real estate developers, who have started to accuse the government of accusing the government of accumulating land instead of selling it.

Chief Secretary (the highest chief executive after the Governor) Anson Chan hurriedly expressed his position, claiming that the Hong Kong government would increase the supply of land. The Consumer Council, which is affiliated with the government, speaks for the government, accusing real estate developers of not selling the properties they own and hoarding them in strange areas.

Legislative Council member Emily Lau scolded the government for its help, criticizing the Hong Kong government for enriching several real estate developers and being unable to do anything to stabilize property prices.

Councilor Zhang Wenguang bluntly condemned the more than 10 real estate developers who joined forces to control the land and property market: "If you own land, you can't build a building, if you build a building, you don't sell the building. When you sell a building, it's speculation, and if you speculate, it turns into an empty building. This is an extremely absurd phenomenon. , can’t tolerate it any longer!”

Suddenly, it turned into a war of public opinion!

This is probably the highlight moment for real estate developers. They actually do not lose to the Hong Kong government in terms of public opinion, and things get interesting.

But to be honest, although Lin Zhichao has always been a "handsome tiger" in real estate, his reputation is better than that of other rich people:

First of all, Lin Zhichao's company spans multiple industries. It is not just a real estate developer, but also has many interests in manufacturing, technology industries, etc.

Secondly, the rise of Hong Kong culture has made Lin Zhichao even more "great". After all, he has supported many people.

Finally, Lin Zhichao's success in the world, especially in Japan, the United States, Singapore, Southeast Asia, the Mainland and other places, made public opinion believe that Lin Zhichao's success was not entirely due to Hong Kong. (End of chapter)