"Okay, based on this calculation, Hutchison Whampoa's funds are close to US$600 million." Chen Zhiwen nodded and said.
Why did you work so hard to acquire Hutchison Whampoa?
It is because we bought the property when the land price and stock price were very low. Even if we bear extremely heavy liabilities, as long as the land price rises in a few years, our wealth will increase tenfold. Although Hutchison Whampoa is not a listed company now, its performance in all aspects Finance has entered a period of healthy development, and they are very high-quality customers in the eyes of various banks.
The Huangpu Garden project developed in the past three years has also turned a piece of useless land into a cash flow of nearly 1.5 billion Hong Kong dollars. In addition to other businesses, cash on hand and US dollar loans from banks, it finally has almost 600 million US dollars. funds.
This US$600 million was one of the most important purposes of Chen Zhiwen's original acquisition of Hutchison Whampoa. It is much more than what the arcade has made in recent years. This is of great significance in the upcoming "gold futures".
"Most of Hutchison Whampoa's own funds have been converted into US dollars, and there is still about HK$400 million left. It is estimated that it will take about half a month." Zhou Jiayang added.
"Okay, just continue to redeem it. I won't need it right away." Chen Zhiwen nodded and said.
Hong Kong has achieved freedom of exchange between Hong Kong dollars and US dollars very early, but it is not free enough to exchange billions of Hong Kong dollars into US dollars in a short time. Therefore, a long time ago, Chen Zhiwen arranged for Hutchison, Galaxy, and Hengyi to The company converts Hong Kong dollars in hand into US dollars. As for Midea, Galaxy Trading, etc., they themselves have a large amount of US dollars.
And with such a large amount of funds going long gold, it needs to be done in batches. Therefore, it doesn't matter if the later money comes in later.
"Sheng Chen, now that the funds are almost collected, how will Hutchison develop in the future?" Zhou Jiayang asked again. He knew a long time ago that his boss was preparing for today's fund-raising. Many of Hutchison's real estate properties Project development uses this time as the control node. Now that it has passed, what should we do next? An order from the boss is also needed.
"We are still mainly engaged in real estate. If we can develop the land owned by Hutchison Whampoa, we will develop it. If we don't have enough funds to develop it, we will cooperate with Chinese capital to develop it. In short, we should convert the land in our hands into cash as soon as possible." Chen Zhiwen thought for a while and said.
Compared with Wharf, Hutchison Whampoa holds more land, but in fact, there are not many in prime locations. That is, as long as you have money, you can buy it, so you should take advantage of the rising housing prices in the past two years to get it. Develop it as soon as it is developed, and wait until the next round of real estate crisis to acquire other land at a low price, or even acquire properties or land in better locations.
"Okay, I understand." Zhou Jiayang nodded and said.
"In addition, we should invest more in the retail sector. We have opened several PARKnSHOP supermarkets in Wanwan. I heard that the results are average?" Chen Zhiwen asked.
"Yes, it's not very good." Zhou Jiayang said: "Mainly because there are already many local supermarkets in Wanwan, and locals are used to shopping there, and they were built early and are in good locations, so Even if we sell at a discount, it will be difficult to steal their customers, and the process is very slow."
"How big is the local supermarket in Wanwan? Is it about the same size as ours in Hong Kong?" Chen Zhiwen asked again.
"About the same size." Zhou Jiayang said.
"Actually, there is an opportunity. Wanwan is very similar to Hong Kong, but there is one difference. The urban area of Wanwan has much more room for development than Hong Kong. Generally, such cities expand from the inside out. , as the population increases, it will become a city similar to Europe and the United States. In this way, you and Wu Weibing go to the United States to see how the local Wal-Mart supermarket does business and learn from them, or you Let colleagues in the United States find intermediaries to poach a few Chinese people who work at Wal-Mart, and Wanwan's future supermarket model may be more like Wal-Mart." Chen Zhiwen thought for a while and said.
The terrain of Hong Kong is either surrounded by the sea or mountains, and the towns are separated. Otherwise, the Hong Kong government would not be idle and invest huge funds to build new towns in other places. After all, normal cities in the world The expansion model is to expand from the inside out, such as the mainland in later generations, developing step by step from the second ring road to the third ring road to the fifth ring road and the seventh ring road. This model is much easier than the Hong Kong government building towns.
The structure of a small town, coupled with congested traffic and a lack of cars, etc., make Hong Kong basically unsuitable for the large supermarket model. Instead, medium-sized supermarkets like PARKnSHOP, which cover a radius of about one kilometer, are the most popular.
"I also know a little bit about Wal-Mart. That model is indeed very good. We can try it in Wanwan, but the number of cars in Wanwan is far less than that in the United States?" Zhou Jiayang said.
"The economy can be developed. The current economy of Wanwan is just like Hong Kong ten years ago. Cars are naturally available if you have money. And again, we can also provide a shopping shuttle bus service or sponsor a little money. , let the bus company pass by more." Chen Zhiwen said.
In later generations, domestic cities in the early 21st century, when the car ownership rate was still low, liked to use these two tactics. Those with money would buy their own buses to transport customers, while those without money would find ways to get two more bus stop signs.
"Okay, I'll discuss it with Wu Sheng." Zhou Jiayang nodded and agreed.
"In addition, the type of supermarket has changed, and the name has also been changed. Don't call it PARKnSHOP anymore, just call it RT-Mart. Chinese people like to pronounce words." Chen Zhiwen thought for a while and said: "In addition, there is a little idea, whether it is RT-Mart or RT-Mart PARKnSHOP, no matter where it is in Hong Kong Bay or anywhere, all our retail stores in the future will purchase high-quality plastic bags with our company's name printed on them, and then give them to customers for free when they check out. .”
"A good method. Good plastic bags can be used by many people to carry things frequently. In this way, it is free advertising for us." Zhou Jiayang immediately understood what the boss meant.
"Absolutely." Chen Zhiwen nodded and said. This method was very useful for many mainland supermarkets in later generations, especially the original RT-Mart. The quality of plastic shopping bags was very good. When the economy was not very good and many people still brought their own baskets, this kind of plastic bag was very useful. There are too many, they are easy to carry, and they are light and waterproof. Over time, the advertising effect will be great.
"Then I will immediately arrange for people to go to Japan to purchase." Zhou Jiayang said.
"It doesn't have to be Japanese. Japanese ones should be more expensive. You can try looking for them in the mainland. They may be available there too," Chen Zhiwen said.
Plastic bags seem to be worthless. In later generations, most of them are free in China. It is really due to strong policy pressure that major supermarkets started to charge. The price itself is also very low, but this thing is the downstream of the petroleum-chemical industry chain. Not many in the world can produce this material. Moreover, it requires certain skills to make bags of good quality and low cost. There are currently no such factories in Hong Kong, and most plastic bags are imported from Japan.
Although the country is a little poorer, the petrochemical industry still attaches great importance to it. As long as there are enough overseas orders, the possibility of making it can be very high.
"Okay, I'll send someone to contact China Resources." Zhou Jiayang nodded and said. In the past two years, the trade between China and Hong Kong has been increasing. Anyone with a discerning eye can see that there will only be more and more cooperation in the future. .
A few days later, Chen Zhiwen went to the United States again and spent nearly a month with his New York legal team with more than a dozen investment banks such as Morgan Stanley, Goldman Sachs, Lehman Brothers, Bear Stearns, and Deutsche Bank. Negotiating, reviewing the contract details, and finally signed a long gold contract with each company.
The funds involved totaled US$1.25 billion, including US$600 million from Hutchison Whampoa, US$200 million from Midea, US$180 million from Mortgage Land shares, US$150 million from Galaxy Group, and US$120 million from Hengyi.
Among them, US$1 billion was signed with 5 times futures leverage with more than a dozen investment banks. In other words, Chen Zhiwen used US$1 billion as collateral to borrow US$5 billion from more than a dozen major investment banks to purchase gold.
If the price of gold rises, then you can sell the gold at a high price in a certain period of time in the future. After repaying the loan, you will earn whatever is left. Because leverage is used, theoretically, the profit will be It is 5 times more expensive than buying it directly with your own money.
But in fact, this kind of borrowing requires very high interest. Considering the high benchmark interest rate policy adopted by the United States today to suppress inflation, the cost of doing futures is very high. Whether it is long or short, if the price of gold fluctuates, it will not If it is very large, then all the money earned from futures will have to be given to investment banks.
And if the price of gold falls to a certain extent, the futures position will be liquidated. At this time, the position will either be liquidated or additional funds will be invested to protect the position.
The US$250 million in addition to the US$1 billion is used for this purpose. Many major investment banks also feel that this futures is too risky. If there is no margin, they will not dare to lend so much funds with confidence. Although it is theoretically possible to close the position, but If the gold price falls too fast and there is no time to close the position, part of the loss will be in the hands of the investment bank.
Chen Zhiwen also knew the historical trajectory of gold, but he didn't know the short-term fluctuations. If gold suddenly fell for a short period of time, it would be bad. For safety reasons, he thought this was okay.
This is the result of negotiations between the two parties. If gold rises to a certain level in the future, there will be basically no risk in long futures when the price was low. At this time, the US$250 million that has not been invested can be reinvested. Go long gold.
In this way, you will only lose a little profit, but you can control the risk to the greatest extent.
Of course, Chen Zhiwen also has a backup plan. He made an agreement with Deutsche Bank on the condition of the entire Red Bull company. If funds are needed, he can urgently obtain US$150 million in funds from Deutsche Bank. This is far from Red Bull. Actual value, but for emergency loans, this number is not bad.
Last month, that is, in October, the gold price averaged 240 US dollars per ounce. This month, it dropped a bit, to around 220. It is not clear next month, but according to Chen Zhiwen's understanding, gold rose rapidly in 1979.
If you purchase gold futures at a cost of less than US$250 now, more than a year later, when the highest price of gold reaches US$810, the theoretical profit will be 15 times. However, this is a theory. In practice, it is certainly impossible to reach 800 US dollars. Sell again, otherwise it will be easy to get stuck.
There are also high interest and transaction taxes, but in any case, the returns are so high that only technology investment companies in the next few years will be able to achieve such returns. However, technology companies will have to wait until the 1990s to cash out. .
New York, Waldorf Astoria Hotel:
"Eric, there is chaos in the Middle East again, and the oil crisis is on the verge of breaking out again. If you invest in gold at this time, you will probably make a fortune again." Henry Morgan said while drinking high-end red wine : "This shouldn't be just luck, right?"
"It's just luck." Chen Zhiwen smiled and raised his glass to take a sip. This was a bottle of red wine that cost tens of thousands of dollars a bottle. It was a treasure from the 1920s. Henry Morgan got a few bottles by chance. Brought it to share with Chen Zhiwen.
"Okay, it's luck, so tell me, should I go in and have a play too?" Henry Morgan said with a smile.
"Yes, as long as you have money, it will be fine, but again, you bear the risk at your own risk, especially if you want to do futures, it really depends on your luck." Chen Zhiwen said.
Since the end of the U.S. dollar gold-linked system, gold has been rising. It is not a loss to buy gold, but it is not necessarily a long position. The fundamental reason is high interest rates and possible short-term downward fluctuations.
In fact, if you go long gold with high interest rates in any year after 1973, even if you make money, it cannot be said to be a very successful investment, because the growth rate of gold is very slow, and even if you go long, you may not be much better. Investment, such as real estate in Hong Kong.
Of course, if you use higher leverage, you will theoretically make more money, but the risk will also be greater, and investment banks generally will not agree to a leverage of more than 5 times for non-foreign exchange, international bond and other futures, because this is harmful to the economy. Their risks are also very high. Before the advent of Internet trading, many investment banks may have suffered heavy losses because they did not close their positions in time.
This is why Chen Zhiwen only started to be long in gold at the end of 1978, because only the high growth rate in 1979 was worth buying. The reason why gold rose so sharply in 1979 was actually because of the outbreak of the second oil crisis, and OPEC’s third The second provocation to the dominance of the world police has led to countless investors not being optimistic about the future global economy. When oil prices rise from US$10 to more than US$30, it becomes difficult for any normal industry to operate because no one can do without it. A large number of industrial products derived from freight and petroleum.
When everyone is not optimistic about the economy, they will naturally choose the safest investment. With a lot of big capital behind the scenes, the price of gold will naturally skyrocket.
"You're done, so naturally I have to follow." Henry Morgan said with a smile. He knew that Chen Zhiwen was doing long gold, but he didn't know how much money he invested. This was a secret, and he wouldn't be stupid. Asked, but since Chen Zhiwen invested, he thought he could give it a try.
For smart people, it doesn't matter if you don't know how to invest. Just follow someone who can invest or invest in his company.
"Okay, then I'll leave Pac-Man in the United States to you. Hong Kong will develop another arcade machine. Next year, you can check it out when you have time." Chen Zhiwen added.
(End of chapter)
