Wolf of Xiangjiang

After returning to Hong Kong.

Yu Deqiu, CEO of Taifook Infrastructure Group, came to Lin Zhengjie's office.

Yu Deqiu was previously the CEO of Power Assets Holdings. After the merger of Taifook Infrastructure, Power Assets Holdings (Hong Kong Electric), China Motor Bus and Kowloon Motor Bus, Yu Deqiu became the CEO of "Taifook Infrastructure Group" and Lam Ching-kit served concurrently as the Chairman of the Board.

"Boss, we have received a message - a consortium consisting of Australia's Macquarie, the Abu Dhabi Investment Authority of the United Arab Emirates and the Canadian Pension Plan, referred to as the 'Macquarie Financial Group', is preparing to compete for the huge infrastructure deal of the British power distribution business 'EDF Energy'."

Lin Zhengjie is not surprised. As a country with a world-leading business environment and a business-based nation, the UK's power distribution business is a stable investment project.

不过按欧盟要求，为使英国对可再生能源的依赖从15％降至2％，英国电网需实施大规模升级方案：在2012年前耗资140亿英镑、2020年前投入135亿英，进行全方位的电网技术改造和扩大覆盖范围。（注：EDF Energy公司占英国电力的25%份额）

However, the large-scale acquisitions by EDF in the early stage have made it heavily indebted, resulting in slow grid construction, with some construction delayed until 2018, which undoubtedly hindered the UK's renewable energy development goals. Therefore, since October 2009, EDF has hoped to sell its UK distribution business to solve the urgent problem.

Taifook Infrastructure Group had expressed its intention to acquire this asset last month (November). Moreover, this asset is very important to Lam Ching Kit, because the asset value of Taifook Infrastructure Group is too small compared to Taifook Group and Wheelock Group, which makes Lam Ching Kit feel guilty towards his youngest son.

Lin Zhengjie then asked: "How much do you think this asset will cost in the end?"

Yu Deqiu reported in detail: "According to our analysis, taking over EDF Energy means controlling about 1/4 of the UK's power grid distribution market, with a transmission capacity of about 890 billion kWh, about 780 million customers, and a service area of ​​29165 square kilometers, covering London, the east and southeast of the UK. The economic output of these regions accounts for about 40% of the UK's CDP. The power grid also supplies power to London's four airports, the London Underground, the Channel Tunnel connecting the railway, the London Stock Exchange, famous attractions, and important public facilities. The power transmission business in these areas will bring stable income. Analysis predicts that the return on investment of the UK power grid is as high as 4%, and if the acquisition is successful, Taifook Infrastructure's business in the UK will increase several times. The price is expected to be between 15 billion and 500 billion Hong Kong dollars. With the strength of Taifook Infrastructure Group, it is difficult to acquire it alone. If Taifook Group or your private enterprise is brought in, the acquisition pressure will be less."

After all, Taifook Infrastructure Group is just a company with assets of around 200 billion yuan.

Lin Zhengjie did not immediately answer the question, but asked: "Taifu Infrastructure Group, what is the expected revenue and profit for this year?"

Now that it is December, we can basically know the profit situation for the whole year.

Yu Deqiu answered very professionally: "Revenue is expected to be around HK$150 billion, and profit is expected to be around HK$95 billion. Among them, Hong Kong Electric's profit is about HK$45 billion, accounting for about 47%. Hong Kong's profit is about 55% of the total profit (the profit of China Motor Bus and Kowloon Motor Bus accounts for 9%. The two bus companies are just delisted, still using the company name, and have rich properties). Overseas profits have soared, accounting for more than 40% for the first time, reaching 45%. The doubling of profits mainly reflects the operating performance of the Ratchaburi Power Plant in Thailand in the six months during the period, the increase in the stake in the UK Northern Gas Networks, the profit of the Wellington distribution network in New Zealand, and the investment income of the mainland power plant after the acquisition was completed in April this year."

The annual profit is nearly 10 billion yuan, which may not be much compared with Taifook and Wheelock, but it is at a similar level to Sun Hung Kai, or even slightly higher.

This is due to:

Firstly: after acquiring HK Electric, it made full use of its overseas development of power plants and distribution networks;

Secondly: to set up Power Industry in the later stage to further develop related businesses around the world;

Later: Taifook Infrastructure, China Motor Bus and Kowloon Motor Bus were merged, which led to a sharp increase in assets;
Finally: The British assets acquired earlier are now generating huge profits.

After thinking for a long time, Lin Zhengjie said: "If 50% is paid by project financing and the remaining 50% is paid by Taifook Infrastructure Group, there shouldn't be any problem."

Upon hearing this, Yu Deqiu realized that his good intention to persuade the boss to "use the good assets more for his own benefit (that is, to use private funds or take a larger stake in Taifook Group)" was rejected, mostly because the boss wanted to build a bigger family business for his youngest son.

He then went on to say: "At present, Taifook Infrastructure's cash flow is HK$135 billion and its annual profit is nearly HK$ billion. The acquisition of this project will occupy several years of profits. As for when EDF Energy can contribute stable income to the group, it needs to be considered comprehensively."

If the profits of 5 to 6 years are used to acquire this project, how will Taifook Infrastructure Group develop in the next five years?
This is what Yu Deqiu wants to talk about!
"I will arrange for Hengfeng Bank to provide a low-interest loan. It won't be a big problem."

With just a few words, the situation changed drastically. Yu Deqiu smiled and said, "Then there will be no problem!"

Since we have the support of the consortium, how could there be any problem?
In fact, Hengfeng Financial Group will gradually become the "consortium core" of Lin's enterprises, and Lin's related enterprises will quietly support Hengfeng Bank to form a consortium network.

Although Hengfeng Bank is not as strong as HSBC and Standard Chartered, it has caught up with and surpassed Hang Seng Bank.

Hengfeng Bank can provide Taifook Infrastructure with a loan with extremely low interest, and the amount can be tens of billions of Hong Kong dollars, which is the best support.

By lending such a large sum of money, Hengfeng Bank can not only be sure that Taifook Infrastructure Group can pay it back, but also Hengfeng Bank has the support of other Lin's companies. There is no possibility of a bank run after the "loan-to-deposit ratio" is increased.

In fact, Hengfeng Bank's 'loan-to-deposit ratio' has always been very high, precisely because of the support of the various Lin companies, including Lin Zhengjie's private enterprise.

At its peak, Lin’s enterprises (including private enterprises) alone had deposits of more than 2000 billion yuan in Hengfeng Bank (08-09).

"Well, we are officially preparing to acquire EDF Energy. I will arrange for people from Bahrain Bank to assist you in this major acquisition!"

"Ok"

As for the management after the acquisition, there is no problem at all, because firstly, there are similarities between the business management of Hong Kong and the UK, and secondly, Lin Zhengjie has plenty of talents under him.

Time flies, and it is February 2010 in a blink of an eye.

At the annual financial report meeting of Wheelock Group, Lin Zhengjie, President Yuan Tianfan and new director Lin Wenliang attended the meeting. For a time, the media focused their cameras on Lin Wenliang.

In fact, Lin Wenliang is considered a darling of the media, but his brother Lin Wendong is different. He is more "high-profile" and the media has always been able to capture his gossip in recent years.

As for his career, Lam Man-tung has been involved in the major acquisition and sale projects of Wheelock Group and served as the president's assistant for a long time. Therefore, Yuan Tianfan can be regarded as Lam Man-leung's "master" and "master".

At the beginning of the meeting, Yuan Tianfan introduced the development of the Wheelock Group to the media, and it sounded like the development was very good!

The main businesses of Wheelock Group are currently divided into: energy and minerals, port shipping, telecommunications and Internet, retail and cosmetics, biopharmaceuticals, and Wheelock Financial.

Energy Minerals: Energy is of course Husky, which owns a 62% stake in Canada's largest oil company and is one of the world's top 420 companies (2009). In this life, Husky has been developing very well, thanks to the acquisition of a large number of oil and gas wells when oil and natural gas were cheap. Last year (30), although oil and natural gas prices fell, it still created a net profit of billion US dollars, becoming Wheelock's golden egg.

The main investment types are stocks of iron ore companies, including Vale of Brazil and FMG of Australia, which are strategic investment shareholders. The company has also invested in a small amount of stocks of many iron ore companies, such as Rio Tinto, BHP Billiton, Anglo American, etc.; and its layout in the lithium ore field has reached a certain scale.

Terminal Shipping:

Wheelock owns 31 container terminals around the world and a fleet of 600 million tons. In this business, it has also begun to invest in logistics, supply chain and other businesses.

Telecommunications Internet:
Wheelock has telecommunications businesses in seven countries and regions, and is still the largest telecommunications operator in Hong Kong; in the Internet sector, it has a huge Internet business portfolio including TOM.com, TOM cloud computing, mobile payment, video websites, comics websites, etc.

Retail and Makeup:
Its retail business relies on high-end department stores such as Lane Crawford and OK convenience stores, and its business volume is not very large; but its cosmetics business has already developed. It is a giant among Asian cosmetics and beauty companies, with a large sales share throughout Asia, and has entered Europe and the United States for many years.

Biopharmaceuticals:

The revenue has exceeded 3 million US dollars, and we have achieved certain results. The layout over the past 20 years is not easy. In particular, in 2009, 8 new drugs entered clinical trials, setting many industry firsts. The future is promising!
Wheelock Financial.

Aircraft leasing companies, financial investment, real estate finance and other businesses.

Among the six major business segments of Wheelock, each major business segment actually has many small business segments. The operating complexity of the overall group is almost the same as that of Taifook Group.

(Taifu Group is not a real estate company, but a very diversified company. The many "brands" alone have proven the complexity of its operations, such as Fila, Master Kong, Nongfu Spring, Xtep, etc., not to mention that it also owns a media group. Even the real estate itself is very complex because it operates shopping mall brands, rather than a simple rental and sales relationship.)

袁天凡继续汇报道：“去年会德丰集团录得净利润352亿港币，同比增长15%3G亏损45亿港币，同比增加20%，集团登记3G客户总人数期内增加29%，目前已经超过2680万名（全球）”

This recurring profit is definitely down a lot compared to 2007. Husky alone has a $2007 billion reduction in recurring profit compared to 30 (excluding non-recurring profit from asset sales); and shipping also saw a significant drop in profit compared to 2007.
3G has been losing money every year, but once it sells its assets, it will generate large amounts of "non-recurring profits". The telecommunications industry is still a long-term business.

Overall, the annual profit is HK$352 billion, which is still about the same level as Disney, and is also among the top 200 of the "Fortune Global ".

Moreover, this level is not only much higher than that of the current "Hutchison Whampoa" (Hutchison Whampoa has a profit of less than 150 billion), but also more than double the profit of Hutchison Whampoa in the same period in the previous life (it was only more than billion in the previous life).

When it came time to ask questions, reporters rushed to grab the opportunity to ask questions.

Reporter: "Mr. Lin, Wheelock Group currently still has a huge cash flow (US$165 billion). Does this mean that investment channels are reduced?"

Lin Zhengjie: "No, it's after 2008 that we haven't had time to spend it (laughing); of course, maintaining sufficient cash flow is also very necessary."

Reporter: "This year, Taifook and Wheelock have greatly reduced their dividends. Is this related to business operations? Or do they have any new plans?"

Lin Zhengjie: "If you earn less, you will get less. Companies also need to seek new development opportunities, otherwise they will be eliminated, so it is necessary to maintain cash flow."

Reporter: "Congratulations on being the world's richest man again this year, still surpassing Bill Gates."

Bill Gates owns about 25% of Microsoft's shares. Microsoft's market value this year is 2500 billion US dollars, so his net worth is probably more than 600 billion US dollars.

Last year, the Hang Seng Index rebounded rapidly and the market value of Taifook Group once again exceeded HK$11000 trillion. Lin Zhengjie still holds 49%, and this part of assets alone is nearly US$700 billion.

Lin Zhengjie: "Sooner or later he will regain the title of the world's richest man"

Reporter: "You mean Microsoft's market value will rise sharply in the future? Do you have any Microsoft stock?"

Lin Zhengjie: "I don't have any"

This is a fact. Lin Zhengjie did not invest in Apple, Microsoft, Amazon, and Google, but his wife invested a total of about 1.2~1.5% (total) of the four stocks.

Reporter: "This year, Mr. Lam Man Leung was elected as a director of Wheelock Group. Are you planning for the succession?"

Lin Zhengjie pointed at his young face and said with a smile: "Do you think I need to make a handover plan?"

There was a burst of laughter at the scene. Although Lin Zhengjie is 52 years old, he looks like he is less than years old (he is deliberately pretending to be old).

Of course, Lin Zhengjie is indeed making a "succession" plan, but his handover is definitely different.

It is expected that his children will not be truly in power until after 2024; but around 2017, Lin Zhengjie may retreat behind the scenes in a "semi-retired" manner (remaining as chairman of the board of directors).

After the meeting, Wheelock's performance and dividend plan still shocked Hong Kong and even spread to the world.

Simply put, the second richest man in Hong Kong, Li Ka-shing, whose two companies, Cheung Kong Holdings and Hutchison Whampoa, only made a profit of more than HK$230 billion (140, 95).

The Wheelock Group alone has surpassed Cheung Kong Holdings, Hutchison Whampoa and Sun Hung Kai Properties.

Not to mention, the parent company of Wheelock Group, Taifook Group, had a profit of HK$2009 billion in 610, making it a real giant.

The two companies have nearly 100 billion yuan in profits, of which more than 70% are generated overseas and in China. (End of this chapter)