After spending two days at the fedmart headquarters, Chen Zhiwen took his team to New York. Citibank has acquired more than 5% of Wal-Mart's stock. According to U.S. law, a share of 5% needs to be announced in the stock market. Once, in the same way, when it reaches 10%, 15%... it also needs to be announced, and so on.
Just as he guessed, an unknown company acquired 5% of the stock of a well-known supermarket retail listed company. It did not cause any fluctuations. Even the Walton family probably wouldn't care. After all, their family controls With more than 50% of the stocks, no one can threaten them.
"Mr. Chen, your investment is very successful. In only about half a year, the Wal-Mart stock you purchased has increased by 20%." Upon meeting, Citibank's senior investment advisor Joey said very happily.
"This is just the beginning." Chen Zhiwen said lightly. In front of Americans, especially in front of investment bankers like this, it is best not to have the humility of Chinese culture. Confidence in one's own investment direction is more important.
"Mr. Chen, please sit down." Joey took Chen Zhiwen to the sofa next to the floor-to-ceiling windows. The summer sun shone in, but he didn't feel hot at all. Through the floor-to-ceiling windows, he could see Central Park not far away. And half of New York City.
"The scenery here is very nice." Chen Zhiwen said with a smile.
"There are also apartments for sale nearby. If Mr. Chen is interested, you can buy one. Although the scenery is not as good as the World Trade Center, it is not much worse." Joey smiled.
"That's unnecessary." Chen Zhiwen shook his head and said.
Where they are now is the World Trade Center, the most famous building in New York before 2001. It was just completed last year. As the newest and tallest building in New York, the scenery is naturally very good, and the price is naturally expensive. Only internationally renowned banks and insurance companies , trading companies, and law firms are able to settle in, which is also a symbol of strength.
Real estate in New York has been rising except for 2001, but the rate is not as high as that in Hong Kong. If it is used as a residence, it is not as comfortable as staying in a five-star hotel.
"Mr. Chen said before that he wanted to mortgage shares of Wal-Mart with Citigroup, then purchase shares of Wal-Mart, and then have to mortgage multiple times? Such financial operation methods are commonly used in the treasury bonds and real estate industries, and are also found in the stock market, but The risk is relatively high. I want to know why Mr. Chen is so optimistic about Wal-Mart's stock?" Joey officially entered the topic. As bank representatives, they also need to understand some of their customers' investment intentions as a reference for lending.
Chen Zhiwen said with a smile: "Because of the oil crisis and the economic problems caused by the crisis, including inflation."
"After inflation, won't the retail industry become worse?" Joey asked.
"The overall situation will get worse, but looking at different companies, companies with high costs will be eliminated, and companies with good cost control will gain a larger market." Chen Zhiwen paused and said, "Because a large number of users will Looking for cheaper products, Wal-Mart controls costs very well. Their business style is small profits but quick turnover. Their stores are also located in the suburbs to reduce property costs. Supermarkets such as Celtic and Sears are located in the city center. In a prime location, the rent alone means that operating costs cannot be reduced.”
"But you still need to drive when you go shopping in the suburbs. Now that the gas price is so high, supermarkets in the suburbs may not have any advantages, right?" Joey asked. This kind of leveraged investment is a good choice for investment consultants like them. Risk is also an opportunity. If it succeeds, they will get a lot of commissions, but if it fails, it will seriously affect their income. What's more serious is that the bank will not have time to close the position, resulting in huge losses, and they may not even be able to keep their jobs. Therefore, we are very cautious when encountering this kind of investment.
Chen Zhiwen smiled and said: "This will lead to supermarket users to concentrate on purchasing, so that it is cost-effective to spread the products equally, and supermarkets such as Wal-Mart can gain a higher market share."
"It makes sense, so Mr. Chen also invested in a supermarket himself?" Joey asked with a smile.
"Yes, it's just a small supermarket." Chen Zhiwen nodded and said. As his investment consultant, Joey was very concerned about his actions. In addition, the acquisition was a public act, so it was impossible not to know about it.
However, he also knew that he had acquired a supermarket. Naturally, he could not clearly understand the future layout of the supermarket. In the current concept of many people, warehouse supermarkets belong to a small category market in the retail field. People who do not know much about it may not necessarily You will understand the difference. In the original history, it was the growth of giants such as Costco and Metro that made this industry a new star in the retail field.
"Mr. Chen, in principle, Citibank will agree to your request, but the specific proportion of leverage that can be obtained still needs to be approved by the general manager of the New York branch. But my suggestion is that Mr. Chen will put more leverage in our bank." A sum of cash, using it as collateral, that would be a lot more convenient,” Joey said.
"How much funding is needed?" Chen Zhiwen asked.
"Mr. Chen previously invested a total of 40 million U.S. dollars. We spent half a year acquiring Wal-Mart's stocks. Now the value of these stocks is about 50 million U.S. dollars. If we continue to recycle loans, we can provide the first tranche of 25 million U.S. dollars. , and then it will be 12.5 million U.S. dollars, and so on." Joey accepted: "But if there is a mortgage of 20 million U.S. dollars, the amount can be greatly increased."
"With so much money, wouldn't I buy stocks directly?" Chen Zhiwen said with a frown. After the oil crisis, the global economy fell into a serious downturn, and European and American banks were also very cautious about loans. Before 1972, the maximum mortgage amount for normal stocks could to 70% instead of the current 50%.
"Of course, so we can provide another plan, which is to conduct hedging investment. Mr. Chen can use the funds to purchase stocks of other companies and then mortgage them with our bank. In this way, our bank has a guarantee, and Mr. Chen can also Enjoy the return on investment and get the best of both worlds, but it is best for this stock to be a stock of a large company or a stock recognized by our Citibank." Joey added.
"Hedging, I understand, that's fine, but we'll consider it again after the first loan of 25 million US dollars has been purchased." Chen Zhiwen thought for a while and did not refuse directly. He wanted to leave some hope for the banker in front of him.
The hedging method is feasible, and the risk to the bank has been reduced a lot. However, he really doesn’t have much funds recently. After acquiring fedmart, with fedmart’s current operating situation, there is no way to obtain funds through mortgage, or even return It has to bear its liabilities, and it also needs to build the first Costco branch, which requires real capital investment.
He still has US$30 to 40 million in liquidity in his account, but this money is also a guarantee for the implementation of the plan in Hong Kong. Wharf and Hutchison Whampoa are definitely the top priorities in Hong Kong's layout. Fortunately, Red Bull's current sales in the United States are good. As long as the production capacity in Hong Kong increases, it will be a very cash cow company.
"That's okay. Regarding the contract, our bank will prepare a draft first, and your lawyer can also participate." Joey said with a smile.
"Okay, my lawyer will come tomorrow." Chen Zhiwen nodded and said.
