The rise of Hong Kong's wealthy families

Friday, July 24

Shareholders of Weicheng Company including Bao Yugang, He Jiahao and Li Jiacheng gathered at the Development Bureau to discuss the issue of 488 hectares of land in Tin Shui Wai.

In the large conference room, they took their seats according to the sign on the table. Since He Jiahao was younger, he sat at the back.

Five minutes later, Li Tianren, director of the Development Bureau, appeared in the conference room and apologized to everyone, "Sorry, some things have been delayed and kept everyone waiting."

Everyone said it didn't matter and the director was being polite.

"You are all big shots in the shopping mall, and you must be very busy, so I will tell you directly. The Hong Kong government is planning to redeem 488 hectares of land in Tin Shui Wai from Weicheng Company, and the price given is 2.258 billion. What do you think?" Director Li Tianren said seriously.

No one said anything, and the reason was simple: the Hong Kong government still had access to many things, and they were unwilling to offend the Hong Kong government. Even if they were embarrassed, it would be enough for them to drink.

The person in charge of Huarun Group in Xiangjiang was silent and said, "Weicheng Company has invested a lot of money and energy in the Tin Shui Wai project. According to the current market price, the price of 2.258 billion is very low. We hope that the Hong Kong government can conduct a thorough investigation." , give a reasonable price.”

Although the Huarun Group does not yet have the strength to develop 488 hectares of land, the group's senior management hopes to use this project to become an instant success in Hong Kong. From then on, it will completely establish a foothold in Hong Kong and even have the ability to catch up with Jardine Land. .

Hearing this, Li Tianren frowned. The Huarun Group has a great reputation, and it may accidentally touch something more serious, which is not something that a small development bureau director can contend with.

“This piece of land was originally sold to Weicheng Company for HK$1.5 per square foot, but now the Hong Kong government has redeemed it for HK$52 per square foot, a full 34-fold increase, which has already made Weicheng Company a huge profit. "Li Tianren said truthfully.

"That's true, but it was calculated based on the land price in 1978. Now it should be calculated based on the current land price." The person in charge retorted.

This somewhat explosive atmosphere quickly spread in the conference room, making everyone a little worried.

Of course, everyone wants Hua Run to get more benefits for Weicheng Company and share more with each other.

"Then what price do you think is appropriate?" Li Tianren asked.

"Add one billion more." The person in charge said unceremoniously.

Li Tianren thought for a moment and said, "Everyone, please wait a moment. I'll go ask the Governor of Hong Kong for instructions."

Half an hour later, Li Tianren returned to the conference room and said, "I'm sorry! Your Excellency, the Governor of Hong Kong does not accept the proposal of HK$3.258 billion. The Development Bureau will accept a price increase of HK$300 million at most."

"No! 300 million is too little, at least 900 million."

After going back and forth, the deal was finally concluded at a price of HK$3.058 billion. The Hong Kong government successfully redeemed 488 hectares of land in Tin Shui Wai and sold 38.5 hectares of land in Tin Shui Wai to Weicheng Company for HK$258 million.

Ho Jiahao and others are naturally happy. They can get an extra 800 million Hong Kong dollars without offending the Hong Kong government.

Everyone chose another place to discuss how to deal with this huge sum of money. After all, leaving it in Weicheng Company's account is a waste, because now that the Hong Kong government is involved, the development of the 38.5 hectares of land must follow the pace of the Hong Kong government, which can save a lot of money. Few resources.

The Hong Kong government will not develop Tin Shui Wai in the short term, so everyone is inclined to divide this huge sum of money.

In the end, it was decided to allocate 2.8 billion according to shares. He Jiahao owned 12% of the shares of Weicheng Company, which could be divided into 336 million Hong Kong dollars and earned 309 million Hong Kong dollars.

The next day, the Hong Kong government announced an agreement with the developer Weicheng Company to take back the 488-hectare Tin Shui Wai land in Yuen Long at a price of NT$3.058 billion.

The market was shocked when the news came out, and the real land prices showed that real estate adjustments were inevitable.

A week later, the Hong Kong government announced that it was negotiating with Hua Xia Bank to sell the Murray Road parking lot in Central for NT$1 billion.

Real estate developers were in an uproar and the market became turbulent.

He Jiahao stood in front of the huge floor-to-ceiling window, looking at the Victoria Harbor not far away, the goblet in his hand shaking.

Standing next to him was a man of the same height. A decent suit made the man's back look even more beautiful.

"He Sheng, Weili Real Estate still has a lot of land on hand. Now that the real estate industry has entered the adjustment stage, I am really afraid. If the land price drops directly, Weili Real Estate may suffer serious losses or even be liquidated." Li Shengluo He said worriedly that he very much hoped to get some definite information from He Jiahao. It was not feasible to sell the land now.

He Jiahao took a sip of red wine, looked into the distance, and comforted, "Weiyi Real Estate has expanded too fast, and its pace is very unstable. But now it is just an adjustment. The prices of residential and commercial land are still rising. The MTR Corporation has acquired the subway station." The superstructure project has not yet been fully tendered. If the MTR Corporation cannot get money from real estate developers, the money will have to be paid by the Hong Kong government. Do you think the Hong Kong government will do such a thing?"

Li Shengluo thought about it and felt that what Ho Jiahao said was very reasonable. More than one-third of the Hong Kong government's fiscal revenue comes from land sales. Even if the MTR Corporation is not taken into account, he still has to take care of his own pocket. So this is very possible. This is a warning from the Hong Kong government to let the real estate industry calm down a little.

"Then I'll be relieved." Li Shengluo breathed a sigh of relief, as long as the land price doesn't fall.

He Jiahao thought about his shares in Weili Real Estate Company and did not want to lose anything. He reminded, "After the adjustment incident, you'd better sort out the company's debt problem, otherwise when the real crisis comes, Weili Real Estate will not be able to survive."

"He Sheng means that the adjustment is just a signal?" Li Shengluo was like riding a roller coaster, his mood was up and down.

"I don't know, the possibility is very high. Even though the market is so good, it is just adding fuel to the fire. Who knows when the crisis will come? Huamei Real Estate has begun to reduce debt, and both the Heng Fa Chuen project and the To Kwa Wan project will have The stock market raised funds to complete the project, and the stock prices of some real estate companies also fell in the stock market," said He Jiahao.

He still underestimated the influence of the Hong Kong government's intervention in the local market. Fortunately, the Hong Kong government only warned, otherwise Huamei Real Estate would have been in difficulty even now, let alone bargain hunting in 1983.

At the end of the year, he will raise funds for another rights issue to control the debt ratio of all companies to 20-30%. At the same time, it is best to reserve a sum of funds.

Li Shengluo's mood became bad. It seemed that he was still too optimistic. Even Huamei Real Estate Company was preparing for the coming crisis, so the crisis was not far away.

"He Sheng, does Huamei Real Estate just rely on raising funds to reduce its liabilities?"

Regarding Li Shengluo's question, He Jiahao simply made it clear, "It's not just raising funds through rights issues, but also quickly developing residential land to collect funds, selling stocks in the stock market, and selling some properties in bad locations."

"Thank you He Sheng for your advice!" Li Shengluo said sincerely.

Of course, Li Shengluo was very grateful to Ho Jiahao's "generous giving" teaching, which made him less panicked and able to solve the problem more calmly.

"You are too polite! We are friends, so we should help each other." He Jiahao waved his hand.

If it weren't for the memory of his previous life, He Jiahao wouldn't dare to point out the situation so confidently. Market information changes rapidly, and even figures like Li Jiacheng and Bao Yugang may not dare to be sure. They are just worried about the coming crisis.