Hong Kong 1980: The Savage Era

Chapter 525 [Trip to Korea]

Zhaoan Group Office.

Sitting opposite Luo Qihong was Tan Yunqi, the general manager of Zhaoan Shipping Company, who was reporting on the shipping company's recent operating conditions.

The turnover of Zhaoan Shipping Company in the first three quarters was US$3 billion, and the net profit margin reached 78.75%, or US$4.6 million, a year-on-year decrease of 3.62%.

The reasons for the decline are overcapacity, intensified competition, low freight rates on transatlantic and Asia-Europe routes, and slim profits. However, the volume on Asian routes has increased significantly, especially in the mainland, otherwise the decline would not have been just 8.4%.

"Boss, the revenue from container shipping has increased a lot, but the global delivery of new ships has increased and freight rates have dropped to varying degrees. The profit will continue to decline next year," said Tan Yunqi worriedly.

Luo Qihong nodded. "This is the general trend of the international shipping industry. We cannot change it. We should stop ordering new ships first. Even if the freight rates drop, we should not stop shipping. We cannot afford the loss."

"Yes, I understand." said Tan Yunqi.

In fact, 35% of the ships of Zhao An Shipping Company are employed by companies owned by the Rothschild family, and the number of employments is still increasing, so the impact of competition in the international shipping industry on Zhao An Shipping is relatively small.

Siu On Shipping Company has become a giant in Hong Kong's shipping industry, completely replacing the position of Global Shipping Group, and owns 862 million tons of ships.

The five former Hong Kong shipping giants have fallen into obscurity. For example, the Wah Kuang Shipping Company of the Zhao Congyan family only got out of its difficulties in 5. Its current ship assets are only worth a few billion Hong Kong dollars, which is not enough compared to the Siu On Shipping Company.

Although Global Shipping Group still has shipping business, it has not spent huge sums of money to order new ships in recent years. It now owns more ships with a tonnage than Hua Kuang Shipping Company.

Orient Overseas Container Line, owned by the Tung Chao Yung family, has also sold a large number of companies and ships. It now has only 29 ships with a tonnage of more than 100 million tons. It still suffered a loss of HK$91 million in 2000, but may be able to turn a profit this year.

Among the five shipping tycoons, only the Cao Wenjin family stands out. The family owns 5 ships with a tonnage of 44 million. It also holds a 157% stake in IMC Shipping, a 40% stake in the Malaysian National Shipping Company and a 6.4% stake in the Thai National Shipping Company.

Although the shipping industry has recovered to a great extent today, it is still relatively difficult. After all, the competition is very fierce and one may fall into losses if one is not careful.

"The economic recession in Europe and the United States will soon pass, and the shipping industry will surely prosper. The company will temporarily sign short-term leases and try to reduce long-term leases and transfer them to peers." Luo Qihong said, "Of course, this is done under the premise of ensuring that every ship of the company can be operated."

Luo Qihong is not very worried about the business of Zhaoan Shipping because his family is actively engaged in the mining industry in Australia. Beverage companies in Singapore and Southeast Asia also need ships to transport raw materials, which can easily support the operation of Zhaoan Shipping Company.

This is the confidence of the Luo Qihong family, the mutual cooperation between industries.

After Tan Yunqi left the office, Luo Qihong flipped through the report of the Canadian Petroleum Company again.

Affected by the international situation, oil prices have fallen from $20 per barrel at the beginning of the year to $16 per barrel today. The oil company has also produced crude oil from its oil fields. Although the output is not large, it can basically maintain the company's balance of income and expenditure, so that Luo Qihong no longer suffers any losses.

Luo Qihong took out a calculator and calculated carefully. He spent nearly HK$45 billion on the Canadian oil company and lost around HK$13 billion.

However, the international crude oil market is gradually improving, and it is time for him to make money.

Luo Qihong does not invest much in Canada, mainly in the energy sector. In his opinion, there is not much to invest in Canada.

This is based on Li Jiacheng's previous investment experience.

Luo Qihong personally flew to Seoul, South Korea, to handle Hengan Investment Company's numerous investment projects in South Korea.

South Korea further opened up its market in 92, but unfortunately it still stipulates that foreign-invested enterprises are not allowed to control or operate any domestic enterprises. It just increased the proportion of equity held by foreign capital.

Of course, Luo Qihong had no intention of acquiring any company in South Korea. After all, this place was too small. Except for some high-tech products, everything else needed to be imported, so there was not much point in doing so.

However, in the early and mid-90s, South Korea was in a critical period of rapid development for the South Korean chaebols. Now was the best opportunity to make money, and Luo Qihong also planned to come and experience the power of the South Korean chaebols.

Luo Qihong has increased his investment in South Korea in recent months. Hengan Investment Company already holds a 5% stake in Samsung Electronics, a 5% stake each in Hyundai Motor and Hyundai Heavy Industries, a 4.8% stake in LG Group, and less than 10% stake in a number of small and medium-sized companies.

Hengan Investment Company also wanted to hold more shares, but unfortunately Korean financial regulations did not allow it. Luo Qihong also did not want to attract Korean prosecutors. That group of people was a bit "desperate", after all, they could even bring down their own president.

"Boss, the Korean economy is now on a continuous rise and the situation is very good. The stocks held by the company have appreciated more than tenfold and the current market value is 26.3 billion US dollars." York, head of Korea Hengan Investment Company, reported respectfully.

York was transferred from Heng'an Investment Company in the United States, so he had a detailed understanding of Luo Qihong's power in the United States. He was very clear about how rich the man in front of him was. He was even more powerful than more than 98% of the rich people in the United States.

"I've read the information. The consortiums that our company has invested in are heavily in debt. The total debt of Hyundai Group alone exceeds 300 billion US dollars, far exceeding the market value of Hyundai Group." Luo Qihong couldn't help but frowned. "I'm worried that these top Korean consortiums will collapse."

In Hong Kong, no group company dares to have debt that exceeds its market value, because once the crisis occurs, no one can bear it and will be drowned in the vast ocean of debt.

"Yes, Boss! These Korean companies are really too bold, but this is also the norm for their business development. Currently, many companies have debts exceeding their market value." York nodded seriously.

Luo Qihong thought about it and realized that South Korea's small businesses were being squeezed by the chaebols and were facing difficulties in financing, so it would be difficult for their stocks to have a big increase.

"How much money can we get back by selling all the stocks of small companies?" Luo Qihong asked.

York calculated it thoroughly and said, "Around $1.3 million."

"Boss, medium-sized companies and small-sized companies are all the same. I suggest that you sell the stocks of medium-sized and small-sized companies together to prevent a stock market crash."

Luo Qihong thought deeply for a minute and nodded in agreement, "Okay, then sell them all. Use the recovered funds to quickly purchase shares in Samsung Electronics."

Originally, he wanted to attack Hyundai Motor and Hyundai Heavy Industries. Unfortunately, the ruling family of the Hyundai Group had internal strife, which has already surfaced. Even several family members died in the past few years. It can be said that the Hyundai Group has major hidden dangers.

If it weren't for the Korean company law, Luo Qihong would have wanted to control Hyundai Group himself.
"Yes!" York said.

Luo Qihong knew that the Samsung Group also had the same struggles among family members, but Lee Kun-hee stood out and quickly took control of the situation. He also expanded the Samsung Group dozens of times, putting the family members under great pressure. This was actually a good investment opportunity.

Of course, this is only temporary. In a few years, Luo Qihong will withdraw from South Korea, wait for South Korea's collapse, and then force his way in.

(End of this chapter)