Hong Kong 1980: The Savage Era

Chapter 524 526 [Gas and Insurance]

The China Gas Company Headquarters in North Point.

The original headquarters was located in an office building in the core area of ​​Causeway Bay. Since the Hong Kong government introduced a policy in the past few years that industrial buildings could be converted into comprehensive buildings, China Gas Company decided to relocate its headquarters to North Point and own its own headquarters building.

The Towngas Building has a floor area of ​​57 square feet, a usable area of ​​51 square feet, and is 31 stories high. According to the current market price, it is worth HK$10 billion and is one of the main property assets of the China Gas Company.

With this building, China Gas Company can save nearly HK$100 million in rent each year, while also enhancing the company's hardware strength.

"The company's debt ratio is getting higher and higher, which will soon affect the company's basic operations. We must find a way to prevent the situation from getting worse. Do you have any good suggestions?" Luo Qihong glanced at the many senior employees.

Luo Qihong privately holds 49.8% of the shares of China Gas Company and is the largest shareholder, with absolute control over the company. At the same time, he has been running the company for more than ten years and has accumulated deep prestige among senior management.

"Mr. Luo, the company's debts are mainly caused by the installation of gas pipelines in several large housing estates and investments in gas projects in the mainland. If we want to reduce the debts, we can only stop some non-essential projects first and start again when the company's situation improves." A senior executive said to Luo Qihong.

In recent years, large housing estates have been continuously built in Hong Kong, and China Gas Company has also installed gas pipelines at the same time in response to the requirements of major real estate companies, which naturally requires huge investment expenditures.

These projects also have a slow payback period, and it may take several years to recoup the investment.

As for the investment plan in the mainland, it is more oriented towards the future. The market in Hong Kong is limited. For the long term, we can only advance into the mainland. Currently, we have invested in Guangdong Province, Nanhu Province, Guangxi Province and Fujian Province.

The investment plan is huge, involving HK$28 billion, and investment funds will continue to increase.

"The company's plan cannot be stopped rashly, otherwise how can I explain to the board of directors? Moreover, this is the company's long-term development plan and there can be no delay. Do you have any other suggestions?" Luo Qihong waved his hand and said.

"You can consider negotiating with the Hong Kong government to increase the price of gas." Another senior official came up with a bad idea.

Luo Qihong glanced at the senior executive unkindly. Whether the Hong Kong government would agree is one thing, but whether the gas company would be criticized by the public is another. The public might even boycott the use of gas.

Eventually the gas company will give in and lower the price back to the original price, so why bother yourself with trouble?

"Boss, I think we can expand our sales channels. The two gas manufacturing plants in Guangdong Province can already produce a large amount of gas, while the gas plants in Guangxi Province, Nanhu Province, and Fujian Province have not yet been completed. We can let the factory in Guangdong Province work overtime to help supply gas to these three provinces. This will increase the year-end dividends and alleviate the company's financial difficulties." The Chinese senior executive suggested.

"Will working overtime cause accidents?" someone raised an objecting question.

Luo Qihong said, "This is a good suggestion. Let the gas plant immediately recruit more technicians to expand production and expand sales in these three provinces. Results must be seen within a month."

"We are planning to sell off all the complex buildings we developed in cooperation with Zhaoan Group to raise funds, most of which will be used to repay the company's debts."

"Yes!" the senior executive in charge of property management responded.

"Luo Sheng, the investment and factory construction projects in Nanhu Province and Min Province have encountered some problems. The local government wants to reduce our shareholding ratio to 40%, and at the same time requires us to return the operating rights after ten years."

"No problem! But they have to invest more money. My bottom line is that the company will pay a maximum of 7% of the total investment, and the local government must invest at least 3%." Luo Qihong was very clear about the situation in the mainland.

"Okay, I'll go negotiate with them then."

As long as Luo Qihong agreed, things would be much easier. Luo Qihong knew that the gas industry could not be completely handed over to private individuals, but he could get a share of the shares and receive dividends.

The mainland market is really too big, dozens of times larger than the Hong Kong market. 40% of the profits would be enough for China Gas to sustain for a long time.

In his previous life, Li Zhaoji used China Gas Company to merge part of the gas supply business in more than 300 cities in the Mainland, making the market value of China Gas Company exceed HK$ billion at one time. In fact, the asset value of China Gas Company was far above its market value.

According to Luo Qihong's estimation, after entering the 21st century, the market value of China Gas Company will exceed HK$500 billion, the asset value will reach HK$2000 billion, and the annual profit will exceed HK$60 billion.

Today, the market value of China Gas Company exceeds HK$300 billion, ranking 20th among the top 16 blue-chip stocks in Hong Kong, below New World Development Company.

Immediately afterwards, Luo Qihong came to Central Qichuang Life, Fire & Marine Insurance Company. Although this company was a subsidiary of Zhaoan Group, the company was currently in difficulties and he had to show up.

Qichang Fire & Marine Life Insurance Company was acquired from the former Jianing Group. After being managed by the Zhaoan Group, its market value has now exceeded HK$50 billion. Its business covers the entire Southeast Asian market, and it is currently exploring the mainland and Australian markets.

"The majority of the company's business is still in Hong Kong, but Hong Kong's insurance industry has been hit by Hang Seng Bank and is losing market share. Last year, the company still occupied 36% of the Hong Kong market, but now it has dropped to 33%, and the downward trend is still intensifying," said the senior management report.

"So what measures are you going to take to curb the decline in market share?" Luo Qihong looked around and asked sternly.

"I suggest increasing investment in advertising and placing ads in newsprint, magazines, and television stations to promote the company's insurance."

"I suggest increasing the types of insurance and expanding the business groups. The market in the New Territories is huge and we should not limit ourselves to urban areas and Hong Kong Island."

“Perhaps we can improve the service level of insurance. Insurance should not be completed by signing the contract. We should always follow up, especially the service at the time of claim settlement, which should be completed in time without any delay.”

When Luo Qihong heard the words "insurance service level", his eyes suddenly lit up.

Delaying claims processing will not reduce the amount of compensation paid, but will only lower the company's reputation. Moreover, insurance is not a one-size-fits-all transaction, but more of a long-term service. If the service attitude at the time of signing the contract can be maintained, customers will definitely not leave.

However, this also has disadvantages, that is, the claims settlement speed is too fast, which can easily lead to business processing errors and greatly increase the chances of successful insurance fraud.

"The company needs to conduct training on claims-related services, and strive to achieve 'zero mistakes and make customers feel at home'. Compensation payments must be made in a timely manner. At the same time, if we encounter urgent customers, we can lend them money first and then slowly go through the company's procedures." Luo Qihong said after making the decision.

"As for the problems that may arise during the process, you must make some predictions, discuss solutions, and improve the relevant systems as soon as possible."

"Yes!" the senior executives responded in unison.

Such a decision has greatly expanded the authority of the claims department, which has also made the company's top management turn their attention to this department.

"We need to increase the investment in advertising as well. Let's add 2% to the budget. We need to increase the types of insurance. Even the smallest mosquito has its own value." Luo Qihong instructed, "Increase the investment in the mainland for me."

Although the profit of Qichang Life Fire and Marine Insurance Company is not much, it is also an important part of Zhaoan Group. Moreover, in the future, the insurance industry is a good industry. After all, it will become a daily necessity of people. The size of its market can be imagined, and the profit will naturally become very considerable.

(End of this chapter)