Those Years When I Was Forced to Top the Forbes List

Chapter 333 Real Estate Has Its Own Ways of Playing the Game
The meeting, which began with Chen Xuebing securing the deal with Hanlong Group and the acquisition by the Second Provincial Construction Company, had a very positive atmosphere.

The Ziyang transit warehouse is positioned as a distribution center. Both parties will work together to ensure that passenger, freight, waterway, and railway transportation facilities are fully equipped within two to three years, so that everyone's goods do not need to go to a second station after arriving here.

Goods await consolidation here, where customers can choose the fastest or cheapest mode of transport and be assigned to the appropriate railway or air route. Thanks to the centralized transport scale, land transport is never empty and ferries are never empty, maximizing savings on long-distance transport costs for everyone.

Passenger and freight stations can be established the fastest, within six months, followed by waterways, while railways take the longest to build.

The main purpose of group buying here is to stockpile and wait for goods, which requires a large number of modern warehouses.

Chen Xuebing proposed that the first step should be for everyone to work together on infrastructure construction, first building their respective transit logistics warehouses to form an industrial park, thereby attracting more companies to set up warehouses here, so that the logistics facilities in the two places can be matched.

After consultation between the two parties, the infrastructure project will be carried out in three phases:

Phase One: Laying the Foundation: Joint Construction of Core Logistics Infrastructure by the Government and Enterprises.

Phase II investment attraction: Land will be offered through public bidding to attract companies with long-term intentions to build their own warehouses.

The third phase involves public services: the government will move in to expand the scale of public services and build public warehouses that can be leased.

The first batch of companies to come here aim to build 40 square meters.

These companies receive significant discounts on land prices, but they are also responsible for ensuring the "three connections and one leveling" (electricity, roads, water, and land leveling) are in place in the corresponding areas. They will all use the same design firm to build according to a unified appearance, and the roads will be planned in a unified manner to ensure that the park's granularity is aligned.

So everyone is responsible for paying, and the contractor is the same company.

The contractor should actually be Gu'an Construction, or if Hanlong hadn't left, it might have been Hanlong.

However, Chen Xuebing, who had acquired Hanlong, did not keep the land for himself. Instead, he invited Huaxi Group, a major player in Sichuan, to be the contractor for the first phase of construction. He negotiated with the Development and Reform Commission, the Land and Resources Department, and the Transportation Department to devise a cost-effective plan for everyone. The total cost, from land acquisition to civil engineering, infrastructure, warehousing equipment, management fees, and taxes, amounted to 720 million yuan, averaging 18 million yuan per 10,000 square meters.

This price is more than 10% lower than most people's expectations.

If Hanlong were to do it, even if the price were 20% higher, everyone would just have to accept it.

This move made all parties feel the fresh air in the project and were very satisfied.

Huaxi Group still maintains a profit margin of around 12% and has further strengthened its relationship with Gu'an.

However, the participating parties have different interests and short-term or long-term plans, so the question of how much each party should contribute is still under discussion.

The initial consultations were more enthusiastic than expected, with 11 companies subscribing to 27 square meters. Chen Xuebing also called Liu Qiangdong on the spot to confirm the subscription of 4 square meters.

The remaining task is to distribute the remaining 9 square meters to everyone or find new buyers.

After the meeting, Director Xian, who was mainly in charge of the matter, felt a great weight lifted from his shoulders and tightly grasped Chen Xuebing's hand, saying with emotion:
"We didn't expect this! General Manager Chen implemented the plan effectively, and the result is much better than we imagined! With this 31 square meters, the industrial park is finally settled!"

The target is 40 square meters, but how many projects can actually achieve that goal? A completion rate of over 75% is already quite good!

Chen Xuebing laughed and said, "If everyone were as understanding as Director Xian, that would be great. Chongqing has given me a tough task: to achieve the initial scale of 40 square meters. How about this, when I get back, I'll do some work with various Chongqing companies. You guys should also explore this area. I don't see New Hope Group here, right? They don't have any needs?"

Liu Yonghao is a well-known wealthy man in Sichuan, and has been on the list for several consecutive years. New Hope is now the second largest agricultural and livestock enterprise in Asia, registered in Chengdu. The transportation industry is also closely related to New Hope's business, so it is reasonable to support it.

Director Xian said with a slight embarrassment, "New Hope's business went global quite early, entering Southeast Asia a few years ago. Domestically, their transportation channels mainly rely on road transport. Privately, they transport goods directly from the production area to the processing plant by truck, and the finished products are distributed to retail outlets nationwide through the road network. Dairy products are heavily reliant on refrigerated transport vehicles. Their transportation network is both self-operated and outsourced. Chairman Liu is also often out of town and quite busy, so we didn't invite them."

Chen Xuebing understood; the other person wasn't in Sichuan right now, so it wasn't appropriate to invite them.

"Didn't they acquire Shandong Liuhe Group to do pig and food processing? Moreover, Guangxi and Yunnan are land border hubs for exporting to Southeast Asia. As the Chengdu-Chongqing economic circle gradually expands and the entire southwest becomes a unified whole, the value of this logistics warehouse will increase several times over. How about this, I'll contact Chairman Liu and see what he thinks."

Director Xian's eyes lit up: "You're familiar with it? You didn't... vote for New Hope, did you?"

Chen Xuebing laughed: "You're joking, I didn't buy all the stocks! But Chairman Liu is currently focused on Minsheng Bank, he should be in Beijing now, I'll ask around, I should be able to get in touch with him."

New Hope Group, Orient Group, and Oceanwide Holdings are the three major shareholders of Minsheng Bank. Liu Yonghao previously served as the vice chairman of Minsheng Bank for 10 years, but this year he was kicked out of the board of directors by Zhang Hongwei and Lu Zhiqiang, and is experiencing the first Minsheng Bank dispute.

This matter was likely initiated by Lu Zhiqiang. The reason was that both Zhang Hongwei and Lu Zhiqiang wanted to obtain loans from Minsheng Bank, while Liu Yonghao had always opposed related-party transactions among shareholders. So the two of them joined forces to remove him from the board of directors.

Logically speaking, Lu Zhiqiang and Liu Yonghao had quite a conflict.

But just recently, Liu Chuan, who is very close to Lu Zhiqiang, launched the "China Entrepreneurs Club" together with Liu Yonghao and others.

Members include Liu Chuan, Jack Ma, Wang Shi, Liu Yonghao, Ma Weihua, Yu Minhong, Li Shufu, Guo Guangchang, Wang Jianlin, and others.

Chen Xuebing was among those "waiting for people".

Liu Chuan invited him twice, and Ma Yun also contacted him once, saying that they planned to have a gathering in Beijing on December 7th to officially establish the organization.

Chen Xuebing didn't have time to attend, but President Liu said the list lacked financiers, so in order to expand the influence, he insisted on getting him into the founding member list.

He figured it was a fairly public circle anyway, so he might as well join. Even if it just meant having an extra phone book, it would give him a direct way to contact these people for business in the future.

This is where it comes in handy.

Director Xian clicked his tongue and said, "You people in finance have such a wide network of connections. Chongqing really made the right choice in selecting you as the intermediary for the project."

Chen Xuebing smiled but neither agreed nor disagreed.

During this period, he increasingly felt that his network of contacts was still too small, especially in the real estate field. There were many things he wanted to ask for help from, but he couldn't reach them.

It's time to expand my social circle.

The next day, March 6th.

In Qingyang District of Chengdu, a two-story courtyard has been completely renovated and revitalized.

The office on the first floor was bustling with noise. "I'm telling you, just come! This is the big boss, salary is definitely not a problem. I'm your uncle, I wouldn't possibly harm you!"

"That's right, that's right, Luo Jia Nian! Remember to send it by post! Tell the courier that there are instruments in the box! Make sure to pad them with some foam!"

"Hey! Mr. Long! I remember you worked on a 200,000-square-meter project in Mianyang! Do you still have Lasha's phone number there? Hmm! I'm working on a big project now!"

Project managers are actively recruiting or preparing for their respective projects.

In the general command office on the second floor, several leaders of the Security Group were also discussing matters at the conference table.

“I’ll handle the work related to the Chengdu-Chongqing economic circle,” Chen Xuebing said, tapping his fingers on the table. “But the construction projects should be divided into two parts, not mixed together.”

"The construction command center will be located here."

"The maintenance projects for the expressways and National Highway 213 in Aba and the construction of the service areas will be handled by the Second Construction Company of the province. Their office in Jinniu is too far away. I think we should rent a building nearby and move the office here so that it will be convenient for you to direct the work."

Bi Yaxiong pondered for a moment and said, “There are 82 technicians and construction management personnel on both sides, and 117 skilled workers. If we manage them ourselves, there will be a lot of work to do, and the project manager will have to come to meetings frequently. I suggest that each project be assigned two deputy project managers, one as an administrative supplement and one as a site management supplement.”

Chen Xuebing nodded and asked, "Can you mobilize enough manpower?"

"There's still time. Project investigation, selection, and approval will take at least one or two months. There's also the design work. We need to ask Chongqing Jiaotong University to send people over. We not only need to supplement our team, but also organize skills training."

"Hurry up! The Construction Department and the Land and Resources Department have agreed to cooperate with us. We'll send people to inspect the site immediately and finalize the land and plans within half a month. We'll design and construct simultaneously. We'll produce unified drawings for this project, referencing Evergrande's model."

Evergrande is currently in a period of rapid expansion. In order to acquire land and quickly invest in construction to recoup funds, it is playing the "one blueprint for everything" game. No matter where the high-rise residential buildings are located, they all look exactly the same. This makes it convenient for cost accounting and material procurement, and also saves design fees and time.

At this point, Chen Xuebing became more serious: "For this project, we need to explore our own management model. Our starting point is different from other real estate companies. We can hardly find any large construction companies in China that handle both real estate and civil engineering in parallel and build their own construction teams. Managing them would be very troublesome, and the personnel structure would be very large. But the advantage of doing this is that we can focus our main efforts on materials and supplies. We will carry out centralized procurement, group procurement, and centralized procurement to significantly reduce material costs. I have set a clear goal: to reach less than 90% of Vanke's cost."

Bi Yaxiong was taken aback: "Impossible, right? Vanke is the leading real estate company in China."

Chen Xuebing gave a slight smile.

Impossible?

Some companies have already done it.

Although he had never worked in real estate, in his previous life he actually knew a supplier who had supplied waterproofing materials to both Vanke and Evergrande, and they had talked about the management models of the two companies.

Mr. Wang, the CEO of Vanke, is a second-generation official. He manages the company by setting strategies, and spends his free time skiing, traveling, and making documentaries abroad to cultivate an elite brand image. In terms of business management, different departments perform their respective duties.

Evergrande's CEO, Xu, came from humble beginnings. He earned his first pot of gold through the Zhongda Pipe project and knew the profit margin in material costs. In the early years of the company's growth, he personally managed the materials and negotiated with suppliers, using 90% of Vanke's purchase price as a reference.

Around 08, drawing inspiration from the factory's material management model, Evergrande implemented the first centralized procurement project in the domestic real estate industry, laying the foundation for its future fundraising model.

There's no need to copy Evergrande's funding model, but its initial expansion strategy is still worth referencing.

“For project-wide procurement, you are responsible for gathering suppliers, and I will handle the negotiations. I will finalize all the prices before the project fully commences.”

Chen Xuebing said confidently.

Materials management is not only Mr. Xu's forte, but he was also well-versed in it in his previous life.

“Okay! If you come in person, I won’t have any worries!” Bi Yaxiong agreed immediately.

Purchase price is a sensitive area for business owners in any industry. If the owner decides it personally, there will be fewer disputes later.

At this moment, Cai Zhijian glanced at Kan Zhidong.

Kan Zhidong coughed lightly and said, "Money is still a big problem. Right now, the profits in the stock market are less than 600 million. You're going to spend a lot of money on centralized procurement, right? And you also need to acquire land."

The money spent during this period was all from previous project payments of Gu'an Construction. The headquarters still has some money, which is from debt collection during this period, but it's only about 50 to 60 million.

"That's enough, eight hundred million is enough. The market is so hot right now, we'll have eight hundred million by the end of the month. We'll distribute the profits before New Year's Day," Chen Xuebing said with a smile.

Bi Yaxiong's eyes sharpened.

"Eight hundred million isn't enough, is it?"

Acquiring land alone isn't enough!
Is the chairman planning to play dirty tricks?

I've heard that in some places, deeply entrenched real estate companies pay land deposits and then quickly withdraw them through illegal means to use for the next project.
This is a major project involving several cities.

Chen Xuebing discerned Bi Yaxiong's thoughts from his shifty gaze and chuckled.

“What are you thinking? Eight hundred million isn’t enough to acquire land, but it’s enough to repay our loans. Once we pay off the 7.5 million loan to headquarters, we’ll be out of trouble. I need to renegotiate with the China Development Bank to get 15 billion, but we can’t pledge the entire group’s shares; we can only pledge a portion of Qidian’s equity to leave room for future loans. Once we get the land, we’ll continue to look for loans from banks in Sichuan to invest in the project.”

The money in the bank needs to be put to use.

The first choice is the China Development Bank, because policy banks have low interest rates, which are close to the LPR (Loan Prime Rate).

This bank's money is generally inaccessible to most companies, but companies like Gu'an, which frequently cooperate with local governments, still have many ways to obtain funds from the China Development Bank.

"How long will it take to get the money from the China Development Bank?" Cai Zhijian asked hesitantly. "We just made a repayment, and now we need to get more money. It will take at least one or two months for the assessment and approval process to be completed. Will the money be available before the Spring Festival?"

"It's hard to say, but we'll continue with what needs to be done." Chen Xuebing pondered, his eyes deep. "Real estate has its own way of operating. If we have 800 million, plus the group's funds, after paying off the loan, we should still have at least 100 million left."

"Let's use this 100 million to make a good impression!"

(End of this chapter)