Chapter 130 Huangpu Group
After Liu Zhicheng returned to Hong Kong, he began to hold year-end meetings for various companies without stopping.

In 1979, the Whampoa Group started construction on three reserve plots of land according to plan, namely Hong King Terrace near the Tin Hau Temple in Causeway Bay, Peninsula Terrace in Kowloon, and Po Wah Court on Village Road south of Happy Valley.

"Hong Kong View Terrace built three high-rise apartment buildings with a total of 513 residential units, with an average price of HK$61.4 per unit, and a return of HK$3.14 million in funds."

"Baohua Court has built four high-rise apartments with a total of 684 residential units, with an average price of 73.4 yuan per unit, and a total of 5.02 million yuan in funds returned."

"The Peninsula Tower is two high-rise residential buildings with 320 residential units, with an average price of HK$58 per unit, and a total of HK$1.85 million in funds raised."

The three sites have limited areas and not many properties can be built, but the geographical locations are very good. They are all located in the bustling city center of Hong Kong Island, and the housing prices are slightly higher than in other areas.

Since the budget funds for these three residential buildings had already been approved at the beginning of last year, the funds recovered were all profits for the whole year, with a total reserve of HK$10 billion.

And this is just the revenue that Whampoa Group earns from developing residential projects.

In addition, the rental properties of the Whampoa Group are also profitable. Pier 4, Global Building, Lijing Building, Whampoa Hotel, and some shops and office buildings in Whampoa City have begun to attract investors, with annual profits reaching HK$3.5 million.

The total profit of Whampoa Group in 1979 was HK$13.5 billion, and the cash reserves could have been even greater.

However, due to the development of two new properties, the Yuen Long and Mong Kok subway station properties, a total of HK$4 million was invested in the land.

The total investment for the development of these two properties will reach 10 billion. Fortunately, with the support of a loan from HSBC, we do not have to sell the properties in advance to recover the funds, or find an agency to cooperate with to sell the real estate interests in advance.

Not all of this money will be saved. There are quite a lot of real estate projects that need to be developed this year, and the investment will naturally be very high.

After several years of development, the Whampoa Group has only eight vacant sites left for development. In addition, there are two sites that need to pay additional land premiums to the Hong Kong government, namely Tai Kok Tsui Dockyard and Heung Kong Tsai Dockyard.

Huangpu Group's investment budget this year is also mainly concentrated on these projects.

At today's meeting, Liu Zhicheng first asked about the situation of the Huangpu City Sailboat Tower, which will be the headquarters of Huangpu Group and Shanfeng Investment.

At the same time, this will also be a super five-star hotel.

In its previous life, this classic hotel located in Dubai Bay had 56 floors. Liu Zhicheng planned to design it to be 88 floors high because people in Hong Kong pay attention to 8 floors.

A building with 88 floors is definitely a skyscraper and is also the tallest building in Hong Kong. The construction period of Whampoa Group's "Sail Boat Hotel" is three years. Construction began this year and is expected to be put into use by the end of 82.

Hao Qingwen continued, "Mr. Liu, the interior and exterior design of the Sailing Building has been put out for bidding. The current architectural plan is very mature, but the investment is a bit large. The architectural specifications you require are too high, and the budget is far beyond that of ordinary office buildings. The total cost is about 500 million Hong Kong dollars."

Liu Zhicheng's design goal is to shock the world. Not only should the appearance be novel, but the interior decoration should also be high-end and luxurious. Once the Burj Al Arab Hotel is built, it will become the focus of attracting tourists from all over the world.

However, Liu Zhicheng felt that the budget was not much. With the development of Hong Kong and the planning of Whampoa City, after the millennium, if a single floor of this building was sold, the market price could easily exceed 100 million.

Each of Hong Kong's skyscrapers is equivalent to a small bank, and the current construction investment will greatly appreciate in value in the future.

Liu Zhicheng said: "We will try to get a loan from HSBC for construction funds."

"If we ask HSBC to help with the construction funding for the Burj Al Arab, wouldn't that be a bit of a waste? After all, the total profit in 79 was HK$13.5 billion, which we can fully afford with our own funds."

Liu Zhicheng certainly knew that, to put it bluntly, the purpose of borrowing money from HSBC was just to make friends with him, and the purpose was still to obtain the port of the China Railway Company.

"How much bank loans does our Huangpu Group have now?"

"We currently have a total bank loan of only over 1.9 billion Hong Kong dollars," Hao Qingwen replied.

With such huge profits and loans only accounting for about 30%, the stock price should also rise quickly.

“What is our current market value?”

Hao Qingwen laughed: "Yesterday's share price was 92.3 Hong Kong dollars, and the total market value was 58.7 billion Hong Kong dollars."

In fact, Liu Zhicheng had an impression of the stock price of Whampoa Group. After all, he received briefings every day.

When Liu Zhicheng first acquired Whampoa Group, its market value was only HK$5.79 million. Now its market value has increased tenfold.

Seeing the Huangpu Group continue to grow in size, Liu Zhicheng feels somewhat proud.

This increase is not abnormal, because during this period Liu Zhicheng carried out a major reorganization of the Whampoa Group, and now is the time when Hong Kong real estate is booming, which naturally triggered the Whampoa stock price.

Given the good performance of Huangpu Group, the increasing number of its leased properties and stable annual income have contributed to the steady rise in its stock price.

Calculated by the current urban GDP, the total market value of Whampoa Group is as high as HK$58.7 billion, which is definitely a giant. Liu Zhicheng asked: "What is the current market value of Hong Kong Land?"

Hao Qingwen replied: "The market value of Hong Kong Land is over HK$6 billion, which makes it a leading company."

"Are they that big? When will the market value of Whampoa Group exceed that of Hong Kong Land?"

"Mr. Liu, if Huangpu Group does not implement new strategic mergers and acquisitions, it will be difficult for us to catch up with Hong Kong Land, because our land reserves have bottomed out. We can only develop for another three or four years at most, and the increase in market value will also decline."

The land cost of Huangpu Group's existing land reserves is almost negligible, which also means that Huangpu Group can enjoy huge profits every time it develops a site.

By then, it will definitely be put up for official auction, and profits will definitely decline. By then, the share price of Whampoa Group will definitely increase sharply, and the market value gap with the Land Development Company will become larger and larger.

This is also the reason why Hao Qingwen believes that it is difficult for Whampoa Group to surpass the Swire Properties, but Liu Zhicheng also has a backup plan because he can watch the ups and downs of life with a smile.

In the previous life, at the end of 1981, the market value of Swire Properties successfully broke through the HK$90 billion mark. At that time, the second-ranked real estate company was Li Chaoren’s Cheung Kong Company, with a market value of billion.

However, due to its land reserves, the market value of the Cheung Kong Company has never surpassed that of Swire Properties.

If Huangpu Group can still maintain a 20% increase in market value this year and next year, then by the end of next year, the total market value will be able to break through the billion mark and reach the scale of the previous Changjiang Company.

But sometimes, running a business also requires timing. After the negotiations began in 1982, the Swire Properties began to lose its composure and started to do all kinds of things that would bring down its own business.

Originally, their land reserves were the largest in Hong Kong. During the negotiations, they sold off a large number of their land assets, and the best office buildings in Central were also transferred and sold one by one.

It is conceivable that shareholders will definitely sell off their shares, causing their market value to shrink rapidly. This is the time for Huangpu Group to surpass them.

If Swire Properties maintains confidence, does not relocate its registered office or withdraw its investment, and focuses on developing in Hong Kong, then they will definitely have the strength to maintain their leading position for many years.

Currently, Jardine Matheson and Swire Properties are constantly transferring funds overseas. Unfortunately, they do not have the vision of Liu Zhicheng. They are all a bunch of losers who lose money every time they invest overseas.

In the previous life, all the funds of Jardine Matheson and Hutchison Whampoa's Hong Kong headquarters were lost in the next few years. In order to save Jardine Matheson as an entity, the I-Case Company was established for reorganization.

This included listing the dairy company independently and putting the Hong Kong Holdings on the periphery for sale. If it had not been for the second real estate crisis in 1987, the Hong Kong Holdings would have been acquired by Li Chaoren.

Jardine Matheson Land has not yet made up its mind to withdraw its overseas investments. It still has a monopoly demand for the Hong Kong market and is currently competing for HK Electric.

Liu Zhicheng was not worried about them at all. The Whampoa Group just sat there and did nothing. The land company would collapse on its own in a few years. What was there to worry about?

But it is impossible for the Whampoa Group to wait like this. According to Liu Zhicheng's plan, Hutchison Whampoa will only hold the terminal properties in the future, and the Star Ferry, tram company and Harbour City may all be sold.

We will definitely not engage in new real estate development, and if we are to invest, it will be in dock properties.

Currently, the businesses of Hutchison Whampoa and Whampoa Group are highly overlapping, which often makes Liu Zhicheng feel dilemma in deciding the focus of the development of the two companies.

In fact, the best thing to do is to integrate Whampoa Group and Hutchison Whampoa into a listed company, which would be a giant enterprise.

Integration is definitely necessary, but Liu Zhicheng has been thinking about how to integrate, and they must maintain their respective listing platforms.

In the future, Whampoa Holdings will be a pure dock development company, while Whampoa Group will be a comprehensive company integrating property leasing, real estate development, hotels and trade.

What we need to do now is just a small-scale cooperation. Thinking of this, he said: "In the future, all the scattered land of Wharf Holdings and other corporate land under Shanfeng Investment will be handed over to Huangpu Group for development."

...............

A few days later, the two confirmed the top development project of Whampoa Group this year. One of the projects is located on Sham Mong Road, Sham Shui Po, Kowloon. This location is on the south of Kwai Tsing Ferry Pier and faces the coast. It was originally a warehouse of Hutchison Whampoa and covers a large area. Whampoa Group plans to build eight residential buildings.

The other site is located on Wei King Street in Kowloon City, adjacent to Kai Tak Airport. It is also a reserve warehouse of Hutchison Whampoa. The site is smaller and plans to build six townhouses.

The last one is the old headquarters building of Orange Technology in Kwun Tong. Last year, all the headquarters factories were relocated to Yuen Long Science Park, and several industrial buildings became vacant.

The original building was relatively old and not tall enough, so Hao Qingwen decided to demolish it entirely and rebuild it into three high-rise office buildings.

"The budget for the three sites, namely the residential buildings in Sham Mong Road, Wei King Street and the office building in Kwun Tong, is only HK$1 million. Add to that the HK$4 million start-up capital for the Burj Al Arab Hotel, and the total budget is HK$ million. The Whampoa Group still has sufficient reserve funds."

Last year, Whampoa Group's total profit was HK$13.5 billion. After deducting the budget, there was still HK$9.5 million left.

(End of this chapter)