Chapter 385 Security guards are also a force!

For someone like Shen Bi, being able to invite Li Changhe to his home was, on the one hand, a matter of respect for Bao Yugang, as the two had been friends for many years; on the other hand, it also showed how much he valued Li Changhe.

In his eyes, Li Changhe is now more than just Bao Yugang's nephew. Most importantly, he is also the controller of the property.

As the best real estate company in Hong Kong Island, Hutchison Whampoa is a target that HSBC must win over.

When Hong Kong Land was under Jardine Matheson, HSBC was not Jardine Matheson’s first choice. Jardine Matheson had its own shares in banks and also had other cooperative banks. They cooperated with both HSBC and other banks.

At that time, HSBC had no way to deal with Jardine Matheson because they were all British and Jardine Matheson did not need to look at HSBC's face.

But now that Swire Properties has escaped the control of Jardine Matheson, it has in fact lost many of Jardine Matheson's original financial channels.

At this time, Shen Bi certainly wanted to bring Jardine Matheson into the hands of HSBC and make it a major customer of HSBC.

"By the way, I heard that you, Ayang, are a genius in finance. How about that? Are you interested in opening an account at HSBC and doing financial business?"

The three of them chatted for a while, and Shen Bi took the initiative to speak.

He has been in Hong Kong Island for many years and can speak Chinese fluently, even with a hint of Cantonese.

Bao Yugang came over before Li Changhe, and actually had communicated with Shen Bi in advance.

So when Shen Bi took the initiative to speak at this time, he was actually trying to steer the topic back to business.

"To be honest, sir, that is exactly what I intend to do."

"I am planning to go to the United States to make a financial investment recently. I am thinking of opening an account at HSBC and connecting to the exchange in the United States."

Li Changhe said with a smile at this time.

"That's no problem. We have cooperation with both the New York Stock Exchange and the Chicago Stock Exchange."

Shen Bi said with a smile.

"Besides, sir, I want to take out a mortgage."

"I want to take 30% of the shares of Hong Kong Land and pledge a loan of 300 million US dollars from HSBC. I wonder if Sir is willing to do so?"

Li Changhe continued to ask at this time.

After listening to this, Shen Bi was a little surprised.

"Thirty percent of the shares of Landmark Land? Three hundred million US dollars?"

He knew that Li Changhe wanted to borrow money tonight, and Bao Yu had just greeted him.

However, the fact that Li Changhe took out 30% of the shares of the company still surprised him a little.

This means that most of his shares have been wiped out, right?
Now, after falling into the hands of Oriental International, the shares of Hutchison Whampoa have risen. After all, the news about the Rockefeller, a major American financial group, and the new leader, the Pao family, are all good news for the shares of Hutchison Whampoa, which is much better than the previous Jardine Matheson.

Therefore, at this moment, the stock price of Swire Properties has remained fluctuating around 14 yuan.

The total value of 21% of Hutchison Whampoa's shares is approximately HK$3.7 billion, which is equivalent to US$ million.

Li Changhe wants 300 million US dollars, which is equivalent to 80% of the stock market value.

Banks generally calculate the loan amount for pledged shares at around 60 to 70 percent, with the highest being 75 percent.

Eighty percent is actually an abnormal proportion.

However, Li Changhe is confident in pledging such a high proportion. The assets of Hong Kong Swire are the most core high-quality assets in Hong Kong Island. Moreover, because it is a real estate company, its self-owned properties and buildings are all developed finished properties. Therefore, the shares of Hong Kong Swire can be said to be the best stocks in Hong Kong stocks currently.

Therefore, HSBC is not actually too worried about the risk of depreciation of Hong Kong Holdings. After all, with the current real estate market in Hong Kong Island, the market value of Hong Kong Holdings is actually rising.

"Three hundred million US dollars is not a low amount. I wonder how long you plan to use it, Ayang?"

"Eight months. After eight months, the principal and interest will be repaid. Sir, you can tell me how much the interest will be!"

"Mike, if necessary, I can vouch for him, how about that?"

Bao Yugang took the initiative to speak to Shen Bi at this time.

He saw that Shen Bi was a little hesitant. The pledge ratio of 80% was indeed relatively high.

Hearing Bao Yugang speak, Shen Bi smiled and said, "No, since it's only for eight months, I agree to this amount."

"Of course, Ayang, let's talk business. Your pledge ratio is high, so HSBC won't give you a discount on interest."

"How about an annualized interest rate of 8 points, calculated monthly?"

Naturally, Shen Bi didn't need Bao Yugang's guarantee at this time. He hesitated just now, but in fact, he was waiting for Bao Yugang to speak so that he could take the opportunity to do Bao Yugang a favor.

After living in Hong Kong for so many years, he has become familiar with the Oriental way of communication. Sometimes, favors are very useful.

"Of course no problem, thank you sir."

Li Changhe said with a smile.

Although the interest rate is not favorable, the annualized interest rate of eight percentage points is actually not high.

For stock pledge loans like this, annualized rates of 9 or 10 points are very common, but Shen Bi offered 8 points, which is not too unfair!

A loan of 1600 million US dollars for eight months, with interest of about million US dollars, Li Changhe thought it was okay.

No matter what, HSBC is his first choice. After all, there are not many banks in Hong Kong Island that can take out so much US dollars.

Afterwards, both parties had a great time. Li Changhe and Bao Yugang had dinner at Shen Bi's house and then left.

After the two people left, Shen Bi sat on the sofa in the living room, thinking about something.

Shen Bi also had his own considerations for inviting Bao Yugang and Li Changhe today.

Shen Bi had actually been thinking about what Li Ka-shing had reminded him before. If the Pao family controlled both Wharf Holdings and Hutchison Whampoa at the same time, then with Pao Yu-kong's influence on HSBC, this family would very likely become a family beyond the control of British forces.

Therefore, he has actually been evaluating recently what attitude he should take to treat Bao’s and Jardine Matheson Holdings Group.

But the meeting tonight made Shen Bi feel relieved.

Judging from tonight’s exchanges, this “Bao Zeyang” has a great deal of autonomy in the issue of land acquisition and is not a puppet of Bao Yugang.

All his actions, including decisions on loans, were not led by Bao Yugang, but were entirely decided by himself.

Shen Bi saw it very clearly, and thus let go of his guard against Bao.

This performance actually essentially represents that Hutchison Whampoa and Pao’s are two different companies.

In this regard, Shen Bi felt that this was actually normal.

Because this is very common in the West, even if they are from the same family, the companies and industries they create themselves are not actually closely related to the family, unless they have their own division of equity.

This is very different from the family businesses in the East.

That Li Jiacheng may have viewed Bao's business with an oriental mindset. After all, he has always been an oriental businessman.

Shen Bi checked the information of his nephew Bao Yugang, and found that he had returned from the United States, so theoretically speaking, his thinking should be that of European and American enterprises. And Li Changhe's performance today indeed confirmed this point.

“The oil market?”

"Okay, let me see if you are a true business genius, young man."

Shen Bi was actually a little surprised when he thought that "Bao Zeyang" was going to use such a large amount of funds to enter the oil market.

Young people are really bold.

Such a large amount of capital has entered the oil trading market.

But it's a good opportunity to see whether this so-called business genius is worthy of the title.

On the other side, after returning, Li Changhe came to Bao Yugang's home.

"Thirty percent of the shares of Jardine Matheson. You surprised Shen Bi tonight."

"If you can't pay back this money, HSBC will become the major shareholder of Hong Kong Land."

After returning to the house, Bao Yugang said to Li Changhe with a smile.

Li Changhe smiled and said, "It should be secretly happy to become a major shareholder of Hong Kong Holdings. In my opinion, the real estate market in Hong Kong Island will explode in the future."

"By the way, uncle, how about we enter the residential real estate market together?"

Li Changhe spoke to Bao Yugang again at this time.

Although both Hutchison Whampoa and Wharf Holdings own the best plots of land on Hong Kong Island, these plots of land are often used to build Grade A commercial buildings and the like. Such prime areas are rarely used for residential properties.

“Residential real estate?”

Bao Yugang was a little surprised: "You mean, we should enter the residential real estate market and develop residential communities?"

Currently, Wharf Holdings and Swire Properties are mainly engaged in commercial real estate, and their businesses include office buildings and shopping malls. These properties have high profits and great value. The buildings they build not only appreciate in value, but also have top-notch rents. These are the most profitable real estate projects and are at the top of the contempt chain.

Relatively speaking, residential real estate is weaker. Currently, residential real estate in Hong Kong Island is mainly developed by Chinese real estate companies, such as Sun Hung Kai Properties and Cheung Kong Holdings, which mainly engage in residential real estate.

It’s not that they don’t want to do commercial real estate, it’s that they can’t get good land.

"Uncle, I've seen the population data for Hong Kong Island in recent years. Currently, a large number of people are flowing into Hong Kong Island every year, especially from Southeast Asia, Malaysia, Indonesia and other places."

"The society there discriminates against the Chinese. For example, in Malaysia, not only is there discrimination, but the Chinese are even restricted from participating in politics and the military. Their population is migrating out whenever they have the chance, and Hong Kong Island is currently a good choice for them."

"When these people come to Hong Kong Island, their first choice is of course to buy property to live in. Although our commercial real estate is very profitable, its scope of application is very narrow."

"Shops and office buildings are for the middle class and the elite. Ordinary people cannot afford to buy shops or rent office buildings, which means that our ability to resist risks is actually relatively poor."

"Especially in two years, once the Sino-British negotiations begin, many middle-class elites in Hong Kong will definitely flee, because they are the bourgeoisie and are afraid of the mainland."

"By then, there will definitely be a real estate crisis in Hong Kong Island, with the property market in recession, and commercial real estate will be the first to bear the brunt."

"But residential real estate is different. It targets the general public. No matter how the political environment changes, ordinary people need to have a home and buy a house to live in."

"Once more people flock to Hong Kong Island, the price of residential real estate will definitely be pushed up. In the long run, its profit will not be as high as commercial real estate, but in the short term, its liquidity ability, I think, is stronger than commercial real estate."

"I think residential real estate will bring me fast cash flow, which will make it easier for us to expand into other industries."

"In comparison, the commercial land in Hong Kong Island has been basically divided up. The prime land in Central is mostly held by Hong Kong Land, while the prime land in Kowloon is held by Wharf Holdings."

"In terms of commercial real estate expansion, Hong Kong Land and Wharf Holdings do not have much room for development. We will need to purchase land next. Apart from the new land created by the Hong Kong government's reclamation, there are not many other plots worth buying."

“So I think real estate companies can actually enter the residential industry.”

Li Changhe spoke seriously to Bao Yugang.

The Wharf Holdings that Bao Yugang took over is obviously better than Li Ka-shing’s Hutchison Whampoa, but in the future Hong Kong Island will become the Li family’s city. What is the reason?
The fact is that Hutchison Whampoa has always focused on commercial real estate, while Li Ka-shing has expertise in both commercial and residential properties.

The boom in residential real estate allowed Li Jiacheng to quickly recover a large amount of cash flow, so in the 1980s, he could easily spend billions of Hong Kong dollars on various acquisitions and expansions.

The Bao family can only collect rent from commercial buildings.

The income from rental income is long-term, but the short-term income cannot be compared with the boom in residential real estate.

"There is a market for residential real estate, but the competition is also fierce. Cheung Kong and Sun Hung Kai Properties are both engaged in residential real estate. Do we also want to get involved?"

"In fact, it doesn't matter whether we enter the residential market or not, but uncle, don't forget that we have other industries under our umbrella."

"A residential community actually has its own commercial area, such as a convenience store."

"Landmark owns Wellcome Supermarket, so for me, the establishment of each residential community actually represents the expansion of supermarkets."

"Besides that, there is also the security company I am about to start."

“As of now, residential areas in Hong Kong Island are not equipped with security guards.”

"I plan to equip each residential community I develop with security guards. This is a big advantage for us."

"After all, you are probably aware of the chaos at the grassroots level in Hong Kong Island, where gangs are rampant."

"For a residential community, I calculated that there are 1-2 security guards for every households. Based on the residential plot ratio of Hong Kong Island, each community can actually have to security guards."

“What about ten neighborhoods, a hundred neighborhoods?”

"If we also include our shopping malls, properties, and office buildings."

"In theory, I can arrange a security company with 3,000 to 5,000 yuan in Hong Kong Island. If we expand to other cooperating real estate companies, such as Nan Fung Properties under Chen Dianhua, our scale can be even larger."

"Uncle, these people are actually a great force for the grassroots of Hong Kong Island!"

Li Changhe said seriously at this moment.

After listening to it, Bao Yugang nodded.

He had always known that Li Changhe was planning to start a security company, and it turned out that he had also set his sights on residential real estate.

"It is indeed difficult for security companies to attract the attention of the Hong Kong government. After all, the security facilities in the community are relatively dispersed, and the manpower is relatively dispersed."

“Even if there are thousands of people, if they are dispersed, it really won’t be that good.”

"But, are you planning to hire only mainland Chinese? That would be very risky."

Bao Yugang asked in a low voice at this time.

"No need, most of them are from Hong Kong Island. I just need to take the opportunity to recruit some of them!"

Li Changhe said with a smile.

He doesn't need all the security guards to be from the mainland. He just needs to take the opportunity to arrange for some of them to come over, and then slowly build up a few mobile forces.

As for young people at the grassroots level, local people should be given priority. If those local bad guys are not qualified, you can replace them with others!

(End of this chapter)