Hong Kong 1980: The Savage Era

Chapter 518-520 [Gold and Real Estate]

Luo Qihong's influence in Guangdong Province was ultimately no match for Li Jiacheng, and he could not compete with Hutchison Whampoa and Cheung Kong Holdings in the Pengcheng Yantian Port project. Fortunately, he had already made plans. Zhaoan Group had been operating in Shanghai and Siming City for a long time and had won many projects.

"The Magic City Port project must be done well. It will be one of the foundations for us to gain a foothold in the Magic City." Luo Qihong said carefully.

There is no need to say much about the potential of Shanghai. If Shanghai had not been in decline in the past, Hong Kong would not be as prosperous as it is today.

Now that the Demon City has returned, Luo Qihong cannot miss this opportunity.

In fact, Zhaoan Group has invested heavily in the port field and has port businesses in many countries around the world. Today, Zhaoan Group's port business has become one of the group's pillar industries.

The entire meeting lasted for three hours. Luo Qihong gave development instructions for the second half of the year for each area of ​​the group's business. Naturally, the specific implementation would depend on the senior management.

At the end of February this year, the World Trade Center bombing occurred in New York, USA, killing 2 people and injuring thousands, shocking the whole world.

As a result, starting from March, the gold price in London rose from US$3 per ounce, climbing to US$330 per ounce in mid-June, and now stabilized above US$6 per ounce.

Since Luo Qihong did not have any banks or gold companies, he could only hoard 15 tons of gold through Cheng Yutong's Chow Tai Fook Jewellery Company and buy it through the gold futures market.

His ideal price is $390 per ounce. Although he predicts that the price of gold will climb to the $400 mark this year, he does not want to take the risk, after all, this high price cannot be maintained for too long.

On the golf course.

Luo Qihong swung the club, and the white ball drew an arc and landed not far from the small red flag.

"That's a good shot." Cheng Yutong narrowed his eyes and watched the white ball land. "It looks like the international gold price will continue to rise. Fortunately, I bought a lot of gold with you as a reserve, otherwise I would have lost a lot of money."

"There will still be an increase, but it will not be big and it will gradually stabilize. I am going to sell the 15 tons of gold. Is Uncle Tong interested in taking over?" Luo Qihong asked casually.

"What price do you want? It's too expensive, I can't afford it." Cheng Yutong laughed. He made gold jewelry and of course he needed a lot of gold as a reserve.

"380 US dollars per ounce. Although the international gold price is 377 US dollars per ounce, it will continue to rise." Luo Qihong explained briefly that asking for an extra 3 US dollars per ounce is not a small matter.

"Okay, no problem. $380 is $380. It's still a lot cheaper than it was in the 80s," Cheng Yu-tung joked.

In the 80s, the price of gold once rose to $800 per ounce, which was the price of gold 13 years ago.

Sold at $380 per ounce, just 15 tons of gold made a profit of $2600 million.

The gold futures market made even greater profits, at least six times that of the spot market, with profits reaching as high as $6 million.

"Tell me honestly, how much did you earn this time?" Cheng Yutong asked with a smile. He didn't believe that Luo Qihong only bought 15 tons of spot.

"Including the profits from the futures market, it should be around 1 million US dollars." Luo Qihong said truthfully.

"It's amazing! We made almost 2 million US dollars with just a little effort. This is the annual profit of a medium-sized real estate company," Cheng Yu-tung exclaimed.

Compared with his son Zheng Jiachun, there is a world of difference between them. He always needs his father to clean up the mess for his son.

"I am just going with the flow. The international situation is very turbulent. Gold is a hard currency and it will definitely increase in value." Luo Qihong said a few words.

Cheng Yutong sighed slightly and said, "I am planning to sell 10 floors of Convention Center, which has a total of 150 residential units. Are you interested in taking over?" Convention Center is a luxury apartment building in the Wan Chai Convention and Exhibition Center. It is a high-end residence managed by a self-service hotel. Each unit is between 1000 and 1300 square feet, which is a rare property in Hong Kong.

If New World Development's overseas investments had not run into problems, Cheng Yu-tung would not have been able to sell such prime properties.

In recent years, New World Development has been a little hasty in its development, resulting in a high level of debt. Although the debt ratio is only 5%, it is indeed too high for New World Development, which previously maintained a debt ratio of 3%.

Cheng Yutong is also a master of steady company management. Even if he doesn't make that much profit, he won't take risks in his business.

"Of course I'm interested." Luo Qihong responded happily. Even if he didn't speculate in real estate, he could still give it to his women. Even Bai Jinyan would be very happy.

In Hong Kong, many female celebrities are willing to sleep with others just for the sake of owning a luxury house, which shows how valuable the luxury house is.

"150 units with a floor area of ​​about 17.3 square feet, how about HK$9.1 million?" said Cheng Yu-tung.

Luo Qihong thought about it and reminded him, "Uncle Tong, the real estate market in Hong Kong is booming. If you wait until the end of the year to sell it, you can make an extra 1%. Don't you really want this 1% profit?"

Cheng Yutong smiled bitterly and said, "The growth of Hong Kong's real estate market is indeed very good, but the real estate market cannot continue to rise. If I don't sell, I will always be burdened with high debts, right? After all, the overall plan of New World Development is more important."

"Yeah, that's true." Luo Qihong nodded. Although Cheng Yutong has the reputation of being 'shark-hearted', in fact, the company's operations adhere to the principle of 'steady development' and will not take risks for the sake of profit.

Of course, it was Cheng Yu-tung's courage and prudence that made Chow Tai Fook Jewellery and New World Development successful, otherwise they would have been lost in the crowd long ago.

"If I had half of your financial ability, I would never sell the property of the Convention and Exhibition Centre," said Cheng Yu-tung with emotion. In Cheng Yu-tung's mind, the Convention and Exhibition Centre and the New World Centre are both masterpieces that he is proud of.

It is so painful to sell my masterpiece now, but it is something I have to do.

In the 80s, New World Development Company focused its main energy on the New World Centre in Tsim Sha Tsui and the Convention and Exhibition Centre in Wan Chai, missing out on the best land reserve opportunities. Now it is showing signs of falling out of the list of the top four real estate companies in Hong Kong.

However, New World Development Company has already become the vanguard in entering the mainland, and its future development is promising.

"The Hong Kong government is preparing to auction a plot of land on Beacon Hill in Kowloon Tong, covering an area of ​​22 square feet, which can be used to build 14 ground-floor residential buildings, all of which are super luxury homes. Do you want to get involved?" Luo Qihong was still willing to help Cheng Yutong, after all, this old man was very loyal.

Cheng Yutong thought for a moment and said, "Didn't the Zhaoan Group bid for a piece of land last year? Now they want to bid for this piece of land again. Are they trying to dominate Kowloon Tong?"

"Yes, we won a piece last year and plan to win another piece this year. We expect to make 40 billion yuan." Luo Qihong said, "Zhaoan Group has been attacking everywhere in recent years, and it needs to find some reliable allies."

"Okay, then New World Development will be an ally of Zhaoan Group. We have a lot of cooperation between us, so it should be easy for us to handle it." Of course, Cheng Yutong would not refuse a profitable project.

Moreover, Luo Qihong's Zhaoan Group has never undertaken loss-making projects. You will definitely make money by following Zhaoan Group. Luo Qihong also intends to make New World Development Company rich.

"The biggest competitors for this project should be Wharf Group and Swire Properties. There are reports that the two companies have agreed to bid together. Even if we can win the bid, the price will definitely not be low." Luo Qihong smiled faintly.

Cheng Yu-tung is in the process of clearing up his debts and may not be willing to spend a large sum of money to participate.

"If it's too expensive, New World Development might get less equity," Cheng Yu-tung said thoughtfully.

"No problem! If not, my family company can take over this part of the rights and interests." Luo Qihong responded.

(End of this chapter)