Hong Kong 1980: The Savage Era

Chapter 450 Chapter 452 [Counterattack]

Luo Qihong did not expect that the rent from Dehe Real Estate Company would become his main source of income, especially playing a big role at the critical time of investment diversification.

And with the support and capital recovery of Dehe Real Estate Company behind him, Luo Qihong's investment could be as bold as before.

Luo Qihong then went to Zhaoan Real Estate Company. Since they were working in the same building, it would be a waste to have another office, so they could only hold meetings in the conference room.

"The company's debt has exceeded 55 billion, and the annual interest is 5 million, which will swallow up a lot of profits. If this news is released, it will have a great impact on the stock price." Luo Qihong said, "But the company's current expenditure and investment are necessary. What can you do to alleviate the current situation?"

Today, the normal annual profit of Zhaoan Real Estate Company is only 20 billion yuan. If non-recurring profits are not included, it is less than that of similar companies.

"When the stock market plummeted last year, the company took the opportunity to buy a lot of stocks at the bottom. Now they have risen to a high level. It would be better to sell some of them and use the money to repay debts," Cheng Jianshen suggested.

"The company also has a lot of residential properties. The market is pretty good now, so we can cash out," said Kang Wenyi.

"The company has completed properties in Kwai Chung, Tuen Mun, Wong Tai Sin and other areas, with a total floor area of ​​about 100 million square feet, which can bring back more than 9 million yuan in funds. If that is not enough, we can also sell off the properties in other projects," said Chen Zhilong.

"What about the rent from the property?" Luo Qihong looked at Kang Wenyi.

Zhaoan Real Estate Company is a large-scale real estate developer and also a property rental company, and its annual rent is also a considerable figure.

In the past few years, it has privatized Le Gu Real Estate and Hua Guang Real Estate and acquired some high-quality small real estate companies. Today, Siu On Real Estate Company owns tens of millions of square feet of rental floor space, including the Lijing Center Building, On Leyuan Building, and Lok Cheong Building in Central.
Although the floor areas of these Central commercial buildings are not large, there are enough of them, with 13 buildings with a floor area of ​​more than 180 million square feet. The annual rent is at least HK$10 billion, and the net profit is as high as 70%, exceeding HK$7 million.

"According to your request, rental income has always been the company's investment fund pool, and the funds in it are rarely used." Kang Wenyi said.

"Let's cancel this rule in the future. We already have a lot of properties in Hong Kong. It would be too conspicuous to make further acquisitions. Let's take out all these funds." Luo Qihong said.

"All to pay off debts?"

"No, I will continue to invest in securities and futures." Luo Qihong said, "I have already thought of a solution to the debt, issuing new shares."

Cheng Jianshen warned, “If a large number of new shares are issued, it will dilute the group’s controlling stake, and the group will have to spend a lot of effort to buy it back in the future.”

"It doesn't matter! The group holds too many shares. As long as we hold no less than 40% of the shares, controlling the company will not be a problem." Luo Qihong waved his hand and said.

Zhaoan Real Estate Company is a large listed real estate company that needs to have its own set of operating methods. There is no need for him to use private funds to intervene.

Zhaoan Group is expanding rapidly, and it is no longer suitable to hold a high proportion of shares. After the situation stabilizes in the future, it may be absorbed again.

Hop Cheung Trading Co.
As the company has invested a lot of money in developing the retail industry in Hong Kong, it has now established more than 12 supermarkets and 37 convenience stores, becoming a retail giant after Jardine Wellcome and Hutchison Whampoa.

At the same time, it also affected the big cakes of Jardine Matheson and Hutchison Whampoa, especially Hutchison Whampoa ParknShop.

After losing the competition for Kwai Chung Pier 8, Li Jiacheng wanted to defeat Luo Qihong in other areas to save face, so after much deliberation, he decided to take action against Rocks supermarkets and convenience stores. "Boss, now three beverage suppliers have refused to provide us with branded beverages. If this trend continues, we may not be able to hold on for too long," Li Gukun reported.

"What is the real reason? Is there someone behind this or is it just a coincidence?" Luo Qihong asked thoughtfully.

"According to the investigation, it was Watsons Group that forced those suppliers to make a choice between us. Boss, you know that our scale is not as large as ParknShop supermarket, so it is difficult for those suppliers to choose us," said Li Gukun.

No wonder those suppliers would rather breach the contract and pay compensation than get rid of Rocks. It seems that Li Jiacheng is really angry, otherwise he would not do such a small move.

"Since these people have made their choice, there is no need for us to keep them. Tell those suppliers who broke the contract that as long as they supply us with goods for an additional 45 days, we will not ask for their breach of contract fee," said Luo Qihong.

This decision is quite bold, because the penalty for breach of contract is not a small number, and it may be difficult to earn back the penalty by providing the goods.

"You mean we should buy time to preserve the reputation of Rocks supermarket and convenience store. We can revive it in 45 days?" Li Gukun asked.

"Our investment in supermarkets and convenience stores is far from being compensated by these breach of contract fees. If we want to earn back the principal, we can only take a bold gamble." Luo Qihong said in a deep voice, "Anyway, we are already going to suffer losses, it's just a matter of how much."

"Boss, this is only a temporary solution and not a fundamental solution. The most important thing for us is to solve the problem of suppliers," Qian Yu reminded.

Delaying the time of death by 45 days does not make much sense. Even if a price war is launched, it will only last for one and a half months. ParknShop can definitely hold on.

"That's right! We need to solve this problem. Do you have any good suggestions?" Luo Qihong asked with a faint smile.

Of course he had figured out a solution.

Ten minutes passed and both of them shook their heads, unable to think of any effective solution.

"Suppliers get the goods from manufacturers, which means that Watsons Group deals with suppliers and manufacturers. We can put aside the suppliers, or cultivate our own suppliers." Luo Qihong smiled with the corners of his mouth raised.

"It's a bit too troublesome for us to contact the manufacturers ourselves. The workload is huge and it is impossible to complete it in a short period of time. The second option can be tried." Qian Yu said.

Li Gukun next to him also nodded in agreement.

"Let's give it a try. I don't believe Li Jiacheng is so sharp that he can cut off our supply from the manufacturer." Luo Qihong said.

"However, suppliers' investment will inevitably increase, and they may take the opportunity to ask for some benefits. If they raise prices, we will inevitably fall behind in the competition with ParknShop supermarket." Qian Yu raised a new question.

"No matter what, suppliers will make money. As their investment increases, we can provide them with some support, such as settling the payment in advance so that they can get the profit first," said Luo Qihong.

(End of this chapter)