Those Years When I Was Forced to Top the Forbes List

Chapter 379 A Hundred Billion Hong Kong Plan
(The previous chapter has been reviewed and is being unblocked; there shouldn't be any major issues.)

Nanjing Road, once known as the premier commercial street in China and the birthplace of Shanghai brands, was a place where products were considered to have gained recognition.

Nanjing East Road is in Huangpu District, a pedestrian street catering to mass consumption.

Nanjing West Road is in Jing'an District, positioned as an international high-end destination, and is developing into a large shopping mall.

These are all core commercial areas in Puxi, Shanghai.

The 2.3 square meters of land at No. 163 Nanjing East Road is a business worth billions. It is no exaggeration to say that every inch of land is worth its weight in gold. The average price of one square meter of land is around 15 yuan, which, based on the recent gold price, is equivalent to more than one kilogram of gold.

Besides, where else can you find such a large plot of land near Nanjing West Road for demolition?

"Mr. Chen, the Shikumen protected area you mentioned, is it the Xintiandi area?" Dai Zhikang asked for the first time.

Shikumen is a unique type of traditional residential architecture in Shanghai that combines Chinese and Western styles. It features the spatial structure of a Jiangnan-style courtyard house or a four-sided courtyard house, stone door frames, and doors in various Chinese and Western styles. The external layout is European-style terraced houses.

This is a unique architectural product formed in the former foreign concessions of Shanghai.

Today, Shanghai has 173 neighborhoods with Shikumen (stone gate) architectural style.

Xintiandi is a Shikumen alleyway complex developed in Shanghai in the late 90s by Vincent Lo, a businessman from Hong Kong's Shui On Group.

"No." Chen Xuebing waved his hand: "It's not that far. It's just across the street from Nanjing West Road. The area near Huaihai Road is called Julu Road."

Song Weiping immediately said, "That area is probably difficult to demolish, right? The Shikumen area isn't very large. You can't develop it like you did with Xintiandi back then. The houses are too crowded, and there's not even enough space for a commercial area."

When Shui On Group came to develop the area, they acquired more than 50 square meters of Shikumen alleyway land. As soon as they arrived, they completely demolished the central area, created a 4-hectare (4 square meter) artificial lake, demolished some of the old buildings in the middle, and formed a central axis walkway in the middle of the building complex, connecting the entire block. Then they demolished all the houses in the south and built a modern shopping center, while the historical buildings in the north were left relatively intact, forming a contrast.

After the Shui On Group developed the area, the old buildings were renovated and tenants were brought in, gradually forming a bustling pedestrian area with a rich historical heritage and old-money style.

The area around Julu Road consists of several alleys.

The area itself is small, surrounded by high-rise buildings, and lacks ample space for commercial development, making it difficult to plan and develop. Moreover, unlike Shanghai's special approval for Hong Kong's Shui On Land, converting lane houses into commercial and residential land would involve extremely complicated procedures.

"Mr. Chen, have you obtained the renovation permit?" Guo Guangchang asked hesitantly.

“No.” Chen Xuebing smiled. “But there’s no need to demolish it. I have a plan to preserve the historical style and turn it into a villa area.”

Nowadays, Shanghai developers are focused on building high-rises on vacant land, and they don't even know what a Shikumen villa area is.

However, since Shanghai changed its urban renewal strategy from "demolition, renovation and preservation" to "preservation, renovation and demolition", land prices in Shanghai have become more and more attractive year by year. Real estate developers have come up with many solutions to deal with old building complexes that cannot be demolished.

Build a villa.

The exterior is preserved while the interior is renovated to create a Jiangnan-style courtyard villa.

Chen Xuebing's Sichuan development did not spend much time thinking about architectural style. It was not because he lacked the ability to build the next generation of housing, but because he was thinking of making it cheaper so that residents could move in as soon as possible.

The high-end consumer market in Shanghai, driven by the pursuit of quality of life, is different from that in Sichuan.

Based on his knowledge of luxury residences in later generations, he was fully confident in creating a Shanghai affluent area that combined advanced spatial concepts with historical culture.

"Villa area"

Upon hearing this, everyone looked at each other and understood what was going on.

“If we convert it to residential use, the area isn’t very large. If we can’t use it for commercial purposes, it wouldn’t be very cost-effective, would it?” Guo Guangchang pondered.

That alley is narrow and deep; it would definitely be difficult to do business there if the original terrain were altered.

If you build it into villas, how many units can you make? It's only two or three stories high, so how big is each unit?
Chen Xuebing smiled.

Not worth it?
If I can't build upwards, can't I at least dig downwards?
"I will come up with a plan soon. It will be a commercial area plus a residential area along Nanjing West Road. The Shikumen houses will be converted into villas. Although the area is not large, it will be a high-end luxury residential area with prices comparable to Tomson Riviera."

The crowd was in an uproar.

Dai Zhikang laughed: "Tomson Riviera is just a gimmick. It's still not selling well. It opened at 11 yuan per square meter two years ago, but now it's selling for lower and lower prices."

Tomson Riviera is just a plot of land of more than 20,000 square meters in Lujiazui. It only cost more than 400 million yuan to acquire the land in 1995. It has an extremely high plot ratio and built four 150-meter-high residential buildings. The floor price per square meter of construction area is only more than 4000 yuan. When it opened for sale at the end of 2005, it dared to sell for 110,000 yuan.

Moreover, each unit starts at 400 square meters, and there are also large single-level apartments with sizes of 600 square meters and 1200 square meters. The price of each unit ranges from a minimum of 45 million yuan to a maximum of 100 million yuan.

The whole country was shocked at the time.

But what was the result?

Last year, only two units were sold. In the year and a half since the project opened, only a few units have been sold. I don't even know if there were any shills involved.

The initial price was 110,000 to 130,000 yuan per square meter, but it has now dropped by more than 10,000 yuan per square meter, yet it still hasn't sold. At night, it looks pitch black and is considered a ghost town. Whenever Shanghainese pass by, they point at those four buildings and laugh at them.

"Tomson Riviera occupies only 20,000 square meters and has 220 houses. It is indeed too expensive to start at 100,000 yuan per square meter. However, the villa area offers a large amount of extra space, high-quality living space, and a completely different lifestyle. It is not the same concept as Tomson Riviera."

Chen Xuebing explained only this one sentence before saying, "I started out in finance. When I say I'm sharing with everyone, I don't mean it for nothing. There's a guaranteed contract for working with me. The entire project will be set up in a company, and everyone can invest. If you feel it's not worthwhile along the way, you can withdraw at any time. When you withdraw, I will compensate you for your invested capital at an annualized interest rate of 1.25% per quarter."

Guaranteed minimum.

Everyone was slightly shocked again.

This term is so new in the real estate industry.

Over the past few years, land prices in Shanghai have fluctuated, and everyone is gambling. Those who have lost money can only wait and see, hoping that land prices will rise again. Meanwhile, the interest they have to pay accumulates year by year, and the costs increase year by year.

If there's a guaranteed minimum.
If land prices rise, you can acquire equity to enjoy the increase; if land prices fall, you can always get your principal back.

Isn't that a sure thing with no risk of loss?
Moreover, 5% annually can cover most of the bank interest.

Several bigwigs were tempted.

Borrowing money from the bank to do this business is definitely a good investment.

The key question is whether this project can make a profit given the increased land prices.

Another question is whether Mr. Chen actually has the money to pay out if the withdrawal is made.

If this had been a question before, everyone would have had serious doubts, but now Mr. Chen seems to be the wealthiest person present.

"Mr. Chen, have you reached an agreement with the government? What is the total investment for this project? Is the price reasonable? How much do you need to prepay the government?"

Kim Hye-myung posed a series of questions.

Dahua is a private enterprise, and it just so happens that it has a credit line that it hasn't used yet, so its attitude is the most decisive.

"I just mentioned an idea to the city leaders." Chen Xuebing didn't hide anything and spoke frankly. "The leaders think it's feasible, but they still need to see the specific plan. However, they've already hinted that the development plan for Nanjing West Road is about 60,000 square meters, with a plot ratio of about 4.8. If the Shikumen building complex can be developed while maintaining its original appearance, the land price for Nanjing West Road can be guaranteed at least a 15% discount based on the average land price over the past two years. The total land price, calculated at current prices, is about 13 billion yuan. A 15% discount would be at least over 1 billion yuan. We'll prepay 40% of the total land acquisition cost. Once we have a plan ready, the city's approval is expected to be finalized and a contract signed in the second half of the year."

This plan is better delayed.

In 07, land prices in Shanghai were still at their peak. If the average land price for the entire year of 07 were included, it would increase the cost.

However, it shouldn't be too late, because after the 4 trillion yuan stimulus plan was implemented in 2009, Shanghai's housing prices will gradually recover.

It would be best to sign the contract in July or August of this year to take advantage of most of the low-price period.

When people heard about the preferential policies, they felt that this was a business opportunity.

The 6 square meter area on Nanjing West Road is definitely the most expensive area. Offering a 15% price discount already leaves a considerable profit margin.

Although Nanjing West Road is currently valued slightly lower than Nanjing East Road, it still has a floor price of 30,000 yuan per square meter. With 60,000 square meters and a plot ratio of 4.8, that's nearly 290,000 square meters of floor space. If land prices rise further, 60,000 square meters on Nanjing West Road could potentially be worth over 10 billion yuan.

The remaining 9 square meters are practically free to purchase. No matter how the 9 square meters of land near Huaihai Road is developed, it will be worth more than just a few billion yuan.

As long as land prices rise, there will be profits to be made.

"I can only guarantee this project for two years." Seeing that several people present were slightly moved, Chen Xuebing immediately put forward a new condition: "Before the government completes the demolition, everyone must also decide whether to develop together. Otherwise, the development cycle will be another two years, and I will have to guarantee you a minimum. Then it will not be a business partnership, but charity."

He had no intention of making money with everyone; he was just getting people to invest upfront. He would eventually take back the equity in this project.

Without this restriction, when land prices plummet, some people might still wait and see, hoping someone will bail them out.

If you wait and see for a while, it really might come back up.

To be honest, these past two years have given them some opportunities. Shanghai's housing prices might have already started to recover by July or August of 09. To recover smoothly, we might have to give them a good scare during 08. "Mr. Chen, please come up with your proposal and let me take a look."

Guo Guangchang suddenly said.

He already had a plan in mind.

Chen Xuebing has a good eye, and he's certain Chen Xuebing has money. With Chen Xuebing as a guarantor, it's an excellent opportunity, and he's going to invest in this project.

How much to invest depends on how you plan to invest.

As soon as Guo Guangchang spoke, the others also expressed their desire to take a look at the plan.

Chen Xuebing, of course, smiled and accepted all comers.

This project served as a link, establishing a "recovery mechanism" with numerous real estate companies. When the panic of the subprime mortgage crisis hit, he could talk to these real estate developers about their other plots of land and acquire them all at once.

He glanced at everyone present, feeling a pang of regret.

For its plans in Hong Kong, Shimao Group, Shanghai's largest real estate developer, was not invited today.

No, we need to find someone to recommend Shimao's proposal.

With a major matter concluded, the banquet entered a phase where both hosts and guests enjoyed themselves immensely.

"Zhongjun, you have a good capacity for alcohol!"

"Hey? When you make movies, how much of the box office revenue do you get? How much does it take to break even?"

Wang Zhongjun of Huayi Brothers was toasting everyone he met, and with two Bingbings by his side, he was surprisingly popular.

The bigwigs were quite knowledgeable about real estate and finance, but film was still an unfamiliar field for them. As a casual conversation, they were all quite interested.

"Well, for example, if we invest 20 million," Wang Zhongjun pushed up his glasses.

Guo Guangchang waved his hand arrogantly: "Just say one hundred million! Let's be clear about it!"

Fan Bingbing's eyes trembled.

They start with 100 million. How many movies with a production cost of over 100 million can be made in a year, including those from mainland China and Hong Kong?
Wang Zhongjun usually scrapes together millions of dollars to make movies, but this was the first time he'd met one of China's top tier of wealthy individuals. He swallowed hard and said:

"If the cost is 100 million, the box office revenue should be around 250 million to break even. We can get 40%, and the remaining 60% goes to the cinema distribution channels, taxes, and some relationship expenses."

"Oh, so if you're investing 100 million in a movie, how much will Huayi Brothers contribute?"

"Here's the thing, if we're the main controlling party, we need to assess the investment and then take the lead ourselves, taking the majority of the investment. Then we'll find partners, for example, we'll find some Hong Kong film companies with star resources to cooperate with. We'll agree to take on 60 million. After we start, we can discuss with platforms and investors that we have a lot of cooperation with, and they will also invest, spreading out this 60 million cost. As for how much to spread out, it depends on the situation."

"Oh, so how much do stars get paid for making a movie? Bingbing, how much do you get paid?"

"Well, Mr. Dai, I'm not sure."

"Hehe, you celebrities always beat around the bush. Just say what you want! Little Fan, how much do you want?"

"More than a million, I guess."

"Haha, you're so honest! A little over a million isn't expensive, I think you're worth three million!"

"Hahaha, Lao Dai, you're not talking about a movie, are you??"

"."

A group of older men, slightly drunk, huddled together and started making lewd jokes with the two celebrities.

Chen Xuebing also didn't want to participate anymore. He stood up, waved to Ma Yun, and then said to Wang Zhongjun, "Let's chat! Mr. Wang, come to the office on the second floor in a bit, we'll talk about the equity."

"Hey!" Wang Zhongjun and Wang Zhonglei stood up at the same time and nodded repeatedly.

The two had witnessed Mr. Chen's power and wealth today and had wanted to talk to him for a while, but Mr. Chen was always surrounded by people, so they hadn't found an opportunity.

With such investors on the shareholder list, what problem can't be solved in the future?

The two beautiful women looked at President Chen with sparkling eyes.

Young and wealthy talents.

They talk about billions or tens of billions right off the bat; that's what makes them truly wealthy.

Jack Ma and Joseph Tsai followed Chen Xuebing up to the second floor.

"Mr. Chen, Lao Guo just said you were bidding against Li Ka-shing? What's going on?"

As soon as Ma Yun entered the room, he asked...

He did indeed notice the problem.

Chen Xuebing chuckled lightly, seemingly indifferent, and said, "It's just a land auction in Chengdu, nothing special. Hutchison Whampoa took the land anyway."

Jack Ma, however, was somewhat wary: "I've heard that you have quite a conflict with Hutchison Whampoa. You're asking me to step in regarding the Hong Kong issue? Are you trying to make me take the fall?"

"Bullshit," Chen Xuebing cursed, actually referring to Guo Guangchang.

The boycott of Li Ka-shing in Chengdu was deliberately suppressed by the media and did not become widely known, but only spread locally. Not many people knew that Hutchison Whampoa's counterpart was Gu'an.

Unfortunately, Guo Guangchang had a keen sense of smell and found out about it.

Fortunately, Xu Rongmao from Shimao Group wasn't invited today, otherwise some of the conversations during the meal might have reached Wu Guangzheng's ears, causing him to have concerns and change his mind.

Without Peter Woo, who will coordinate the meeting in Hong Kong?

The meeting in Hong Kong really needs to be finalized as soon as possible.

The preparatory stage must be entered before the conflict with Li Ka-shing intensifies, so that Wu Guangzheng can stand on the opposite side of Li Ka-shing.

“Mr. Ma, I have no conflict with Li Ka-shing, but you know who controls Hong Kong's retail industry. If you want to bring Taobao into the Hong Kong market, it will impact the local retail industry. You also know that if you want to enter this market, you should be prepared to confront Hutchison Whampoa.”

Chen Xuebing passed the heavy responsibility of confronting Li Ka-shing to Jack Ma, testing him to see if he would take it on.

Jack Ma frowned: "Is it really that much of a shock? I visited Watsons when I went to Hong Kong. They sell daily necessities, but the variety isn't that great."

“Big, very big.” Joseph Tsai continued, “The Watsons Group not only has Watsons, but also ParknShop supermarkets and Fortress Appliances. At its peak, ParknShop occupied 7% of the retail market in Hong Kong. Even now, the entire Watsons Group still has a 40% retail share. This revenue accounts for 40% of Hutchison Whampoa’s profits. Moreover, Hong Kong’s express delivery efficiency is higher than that of the mainland. As long as we open up the customs clearance route, goods can be delivered to Hong Kong in one or two days. With our prices, consumer goods can quickly capture a share of the retail market in Hong Kong.”

"They make up such a high percentage?" Jack Ma remained silent for a moment.

In fact, even if Tsai Chung-hsin hadn't revealed this data, Chen Xuebing wouldn't have been very clear about it either. However, he wasn't particularly surprised, as there would have been far more reports about Cheung Kong's monopoly in later generations than there are now.

"Regarding customs clearance and transportation, Qianhai has a deep-water port plan, and the Guangdong-Hong Kong Bridge is also under preparation. Logistics will become more and more convenient, and policies will be relaxed." Chen Xuebing's expression gradually became serious. "I'm contacting you because you have this need. Hong Kong is an excellent platform to showcase yourself to the world. If your Hong Kong Taobao can succeed, it's not just a matter of profit; the international image of your C2C business will also be greatly enhanced. Alibaba International Station can only do B2B business, connecting international merchants. Hong Kong is your only opportunity to showcase C2C overseas, and the paradigm of overseas payment can also be validated in Hong Kong."

"However, opening up this path will be far more complicated than just logistics and customs clearance. There will be many problems. If you are not determined, I suggest you let JD.com do it. Liu Qiangdong is a rough man and he doesn't have so many concerns."

Chen Xuebing continued to delve deeper with his two sentences, striking at the very back of General Manager Ma.

Mr. Ma immediately straightened up.

Taobao is his second-stage rocket.

"I didn't say I wouldn't do it! I just said there's no need for a direct confrontation!"

"You think people are idiots." Chen Xuebing smirked. "If you're going to do this, you need to get the attitude right. Don't wait until someone slaps you and you're not prepared at all. If you go to Hong Kong and respectfully call someone Principal Li, and treat them as a teacher, they won't talk to you about 'a teacher for a day is a father for life'."

Jack Ma's face darkened.

Joseph Tsai laughed: "It won't be easy to enter the Hong Kong market for C2C business. We are prepared for that, but Mr. Chen will still need to help us a lot."

Chen Xuebing raised his eyebrows: "President Cai, you see things clearly. Look, my group's president is also surnamed Cai. We can't write two Cai characters in one stroke. Why don't you come and be my CFO?"

Jack Ma was immediately alarmed.

"Hold!"

(End of this chapter)