A century-old wealthy family that rose from Shanghai

2017 years.

Tsim Sha Tsui, Harbour City, Gateway Tower.

The headquarters of Wharf Holdings is located on floors 30-32 of Gateway Tower.

"Father, last year Wharf Holdings' revenue was HK$435 billion, and its profit was HK$245 billion. Performance in Hong Kong continued to grow, with revenue of HK$169.04 billion and net profit of HK$128.18 billion. Revenue in mainland China last year was HK$135 billion, and net profit reached HK$62 billion, mainly due to the sale of some non-core business projects. Revenue in Singapore last year was HK$129 billion, and net profit was HK$55 billion."

At this moment, Chen Zesong, a third-generation member of the Chen family, was listening to his eldest son, Chen Chuanming, report on his salary.

Starting last year, Chan Man-ming divided the family business into five parts, four of which were passed on to his four sons. Chan Chak-sung also successfully took over as chairman and general manager of Wharf Holdings at the age of 53.

Of course, at this time, Wharf Holdings had already spun off its assets such as 'Global Land' and 'Global Properties', retaining only its businesses in mainland China, Hong Kong, and Singapore.

Even so, Wharf Holdings still generated a net profit of HK$245 billion last year, making it a true profit king.

Chen Zesong calmly stated, "Of the 62 billion yuan profit in mainland China, more than 3 billion yuan came from one-off non-recurring profits from the sale of commercial projects. Wharf Holdings faces a significant challenge: the issue of reinvestment."

Chen Chuanming, 28, is already a director of Wharf Holdings and is being groomed as a successor. He also has a younger brother and two younger sisters, who also have a chance.

He said, "Now my grandfather has strictly forbidden us from investing in Asian real estate, and our assets in mainland China are being cashed out and sold off year by year. We can only turn to Europe and the United States."

Chen Zesong knew more than his son. Since 2012, the family had almost stopped acquiring land in mainland China, and since 2013, they had been selling off some non-core commercial real estate projects year by year.

These decisions were not made by his father, Chen Wenming, but were orchestrated by his grandfather behind the scenes.

However, 'reinvestment' is inevitable, because after he received Wharf Holdings last year, the more than 200 billion in profits this year, as well as Wharf Holdings' extremely low debt and the ability to borrow heavily, are the foundation for 'reinvestment'.

Wharf Holdings' business is actually relatively simple. Its three major Hong Kong assets, Harbour City, Times Square, and Hollywood Plaza, are worth as much as HK$190 billion and have generated nearly HK$10 billion in net profit (other businesses include hotels).

The same is true in Singapore, which boasts several large office buildings and shopping malls (such as Marina Centre and Standard Chartered Bank Tower) and relies primarily on rental income.

Mainland China also boasts expensive properties such as the five major CIFITs and two Times Squares, but it has a large number of real estate development projects (mainly residential properties for sale).

"Wharf Holdings must go global. If we stop investing, our ability to withstand risks will be too weak. I'm planning to visit your great-grandfather and hear his opinion."

Chen Chuanming was taken aback and tentatively asked, "Grandpa has been retired for many years and doesn't ask about these things. Should we ask Grandpa for his opinion first?"

"Fool. Your great-grandfather will always be the most powerful in the family. Come with me and you'll see."

"He is the father"

Chen Zesong understood that when it came to understanding the global situation, his grandfather would always be the guiding light for the family. Now, the most important thing was the Wharf Holdings' reinvestment, and the future global situation and development.

2019 years.

Chen Zechi visited Hong Kong Airlines and convened a high-level meeting.

He was elected chairman of the board of directors of Hong Kong Airlines in 2015 at the age of 44. He is the youngest son of Chan Man-ming.

That same year, he acquired a 31% stake in Hong Kong Airlines, an 85% stake in aircraft leasing company Accipiter Finance, and Global Realty, which owns 165 properties worldwide (properties accumulated by Global Trade over the years).

At that time, Hong Kong Airlines' market capitalization was HK$31 billion, and Chen Zechi's 31% stake was worth only about HK$10 billion. Among Hong Kong Airlines' shareholders, HSBC held about 15%, CITIC held 15%, and the remainder were other institutional investors and retail investors. In fact, if Hong Kong Airlines only held aircraft and route assets to mainland China, South Korea, Taiwan, and Manila, its market capitalization of over HK$20 billion would already be considerable.

The reason for its high market capitalization is that Hong Kong Airlines is also involved in Accipiter Finance's business, holding a 15% stake. Furthermore, it has also participated in investing in the equity of other Asian airlines.

At the start of the meeting, Chen Zechi said, "As an airline with a high proportion of mainland China's aviation business, we need to react quickly to public opinion and deal with negative events in a timely manner. I am very dissatisfied with this incident and order you to make corrections immediately."

Upon hearing this, CEO Rupert Hogg's expression changed drastically; he knew this was a 'political consideration'.

"Our approach is to avoid affecting the entire employee group as much as possible."

Chen Zechi interrupted, "I don't care about any of that. All I know is that we've already caused dissatisfaction on the mainland, which will greatly affect our business development. We're not Cathay Pacific; our main business is mainland routes. We can't be eating our food and then smashing it. If you can't do this, I will take further action at the board meeting."

Hong Kong Airlines has always been a product of the collaboration between the Worldwide Group and HSBC, but it is mainly managed by the Worldwide Group; after its listing, it introduced Chinese capital.

However, in terms of management team, a combination of Chinese and Western approaches is adopted, and the CEOs are mostly foreigners.

I will submit my resignation voluntarily.

Rupert Hogg said firmly.

He understood that the Chen family held sway on the board of directors, and even in the management, he could not possibly establish himself as the sole ruler.

Hong Kong Airlines promptly replaced its CEO, appointing Chinese businessman Lam Siu-po as CEO. This timely move helped repair relations with mainland authorities and mitigate some of the negative impact on public opinion.

Of course, there were also incidents of unrest, namely the significant impact caused by the dismissal of a group of people, coupled with the involvement of the union.

This time, however, the management took an extremely tough stance, quickly firing more people in an effort to salvage their image.

Hong Kong Airlines recruits many pilots and flight attendants from mainland China, so this incident will not shake the overall operation.

After the new CEO took office and disappeared, Chen Zechi convened another high-level meeting.

Seeing the completely new management team made him feel much better.

Deep down, he also felt that the "foreign executives" had always been too arrogant and didn't understand the principle that one has to bow one's head when under someone's roof.

Of course, this "roof" does not refer to him, but to the "bread and butter" of Hong Kong Airlines—passengers on mainland routes, and the official body of the Civil Aviation Administration of China.

at the same time.

Chen Zechi's 'trust fund' has begun to put Accipiter Finance aircraft leasing company on the market, preparing for sale.

In a short time, it attracted the attention of many investors around the world.

Finally, in September 2019, the Maverick Aviation consortium acquired Accipiter Finance aircraft leasing company for HK$612 billion, involving the rights and lease contracts of 195 passenger aircraft.
The return on this investment is very high, as these 195 aircraft also generate substantial lease profits each year.

The results showed that the annual return rate exceeded double digits, making it a more profitable business than commercial real estate.

(End of this chapter)