Chapter 131: Merger of the Century
Liu Zhicheng is not afraid of the loan from Whampoa Group at all. Based on the compound growth rate of 20%, the market value should reach HK$ billion next year.

Even if a stock market crash occurs and the market value is halved, the company will not be insolvent.

What's more, there will be huge profits in the next two years, and Huangpu Group will then sell some fixed assets to implement its debt reduction plan.

Because the industrial buildings in Kowloon will experience a sharp drop in value, with the value only being around 40% of the highs, finding someone to take over at a high price is the most appropriate approach.

.........

Now, thanks to the explosion of arcade machines, home game consoles and walkmans, Orange Technology has created huge wealth for Liu Zhicheng.

At the beginning of the meeting of Juzi Technology, Liu Zhicheng, as usual, asked directly: "Who do we purchase the CPU for our home game consoles from now?"

"Mr. Liu, the home game consoles now use the 6502 CPU produced by Rockwell International, and the price is only 25 US dollars each." Wang Xingfa was prepared and answered directly.

"So what is the current pricing system for game consoles?" Liu Zhicheng asked again.

"Mr. Liu, the current agency price for a home game console is HK$610 outbound from Hong Kong. The wholesale price in Hong Kong is HK$800, and the retail price is HK$999. The cartridge is HK$60 per box."

"Well, how are the sales after one year on the market?" Liu Zhicheng continued to ask.

"It has been one year since it was launched and the market is booming. The total shipment volume has reached 80 units, with a total sales of HK$4.88 million. If the profit of HK$2400 million from the cassette is included, the total profit is HK$2.68 million."

"Not bad." Liu Zhicheng was very happy when he heard the profit of 2.88 million Hong Kong dollars. He had grabbed another cash cow.

I remember that RB sold 6000 million home game consoles in total. That's a concept. The annual sales volume is far from saturation.

"There won't be any difficulties in production."

"Mr. Liu, if our production workshop operates in two shifts a day, we can produce 24 units in 800 hours. Currently, I only produce during the day shift," Wang Xingfa replied.

"Well, that's right. After the market has fermented naturally, I believe there will be a sales boom soon. All departments must fully cooperate, especially the purchasing department."

"Mr. Liu, we now have a new problem. The sales of arcade games have dropped drastically. Last year, the sales volume was only 3 units, and the profit was only 1.5 million Hong Kong dollars. It is expected to drop further this year." Wang Xinfa reported.

With the emergence of home game consoles, arcade game consoles only have a small sales volume in bars and independent game halls.

However, it was also impacted by home game consoles, and the number of players decreased significantly, and it became unprofitable.

"We plan to develop all the arcade games. After all, there is still a certain market and we can't give up. Secondly, you can lower the price appropriately to make it profitable for the merchants." Liu Zhicheng thought and instructed.

It is impossible to give up arcade games, including claw machines. Liu Zhicheng wants to pick them up again and develop new claw machines with more functions to cultivate his future chip industry.

With the launch of the second generation of Walkman, by the end of 79, Orange Technology had shipped 70 Walkmans.

It still maintained a net profit of US$30 and created a profit of US$2100 million, all of which were deposited in foreign banks in the form of knives.

Now there is only one 'CD' project that requires a large amount of investment, and a large amount of cash comes in every month, so the above profits are all cash reserves that Liu Zhicheng can use at any time.

Now only Chigo Industry is basically in a break-even situation due to its large investment in research and development. Liu Zhicheng has never thought about making a profit, but only about technology reserves.

Now Orange Technology's printed circuit boards and liquid crystals have also been mass-produced, but the yield rate is not high, but there is no loss either.

Of course, Orange Technology also has a big project, which is to enter the chip industry, at least to have its own voice in the low-end chip industry chain.

In fact, Liu Zhicheng’s biggest concern is the continuous depreciation of the Hong Kong dollar, especially the alarming rate of depreciation in the past two years.

Currently, 1 US dollar can be exchanged for 5.6 Hong Kong dollars. In the next three years, the maximum exchange rate will be 1 US dollar for 9.6 Hong Kong dollars.

Although the exchange rate was later fixed at 7.8 Hong Kong dollars to 1 US dollar, it was still a huge exchange rate loss. Therefore, this is why Liu Zhicheng tried his best to keep cash in the form of US dollar assets in overseas banks.

Another good way to deal with it is to invest in fixed assets while the Hong Kong dollar is at a high level to hedge the losses caused by the depreciation of the Hong Kong dollar.

But if investing in fixed assets in Hong Kong is no longer cost-effective, Hong Kong's housing prices have now reached the peak of this bull market, and what will follow is a pump-and-dump plunge.

.........

Federal Building.

As soon as Liu Zhicheng sat down in the office, he saw Cherie Chung busying around him, pouring water and preparing newspapers and documents.

Liu Zhicheng flipped through the newspaper and asked with a smile, "Assistant Zhong, this is a job for serving people. Are you used to it?"

"What's there to dislike? I think this kind of job is great." Cherie Chung replied with a smile.

She continued, "Mr. Liu, you are a famous boss in Hong Kong. The media reports your news every now and then. I feel very honored working by your side. How can I not like it?" Liu Zhicheng smiled without saying anything and shook his head slightly.

Zhong Chuhong immediately asked: "Mr. Liu, what do you mean by shaking your head? Are you dissatisfied with my work?"

How could Liu Zhicheng be dissatisfied with her work? He just wondered how he had become an idol in the eyes of young employees.

"No, I just think you look great. If you become a big star, your net worth will easily be several million Hong Kong dollars. But your current job pays less than 10,000 Hong Kong dollars a month. Don't you think it's a pity?"

"Mr. Liu wants me to be an actor? Then I'll go to TVB to be an actor." When Cherie Chung heard Liu Zhicheng say this, she laughed jokingly.

At this moment, Han Chunxi came in and interrupted their conversation, saying, "Mr. Liu, Mr. Shen is here."

The Mr. Shen that Han Chunxi mentioned is Shen Bi from HSBC. Today, Liu Zhicheng invited Shen Bi to attend a meeting of Shanfeng Investment.

Before the meeting started, Liu Zhicheng had a brief communication with Shen Bi.

"Mr. Shen, does the China Railway Shipping Company agree to sell its shares in Felixsto Port?"

"Mr. Liu, we have communicated with each other many times, and the China Railway Shipping Company has basically agreed to sell its shares, but the price is relatively high."

Liu Zhicheng looked at Shen Bi and asked, "What's the price?"

"1 million pounds." Shen Bi shook his head.

Liu Zhicheng was shocked when he heard the 1 million pounds. In his previous life, Li Chaoren only spent 1991 million pounds to acquire the shares held by the China Railway Corporation in 9000.

It is only 1980 now. Eleven years later, the British pound has already depreciated significantly. This is not to say that you think you are the boss.

But there is another thing. Li Chaoren also spent 25 million pounds to acquire 7000% of the shares of Port of Felix from Orient Overseas.

The value of this is also a matter of opinion. But now 1 million pounds is about 9.9 million Hong Kong dollars.

Liu Zhicheng thought about the purpose of inviting Shen Bi on this trip. If everything went well, there would be no pressure on the funds, so he nodded.

"Mr. Shen, Shanfeng Investment has decided to conduct a major integration in order to better develop the business of its subsidiaries. This involves huge amounts of capital transactions, and we need the support of HSBC."

Shen Bi was a little surprised when he heard Liu Zhicheng say this, but he nodded and said, "Of course I am willing. Isn't HSBC's business to serve you?"

"I plan that Wharf Holdings will use HK$5 million to acquire Whampoa Group's Kwai Chung Pier No. 25, while Whampoa Group will use HK$ billion to acquire Wharf's Harbour City project and all its land."

Currently, the market value of Hutchison Whampoa is HK$40 billion, which is basically equivalent to its value. The terminal property is worth HK$15 billion, while Harbour City and its land are worth HK$25 billion.

This transaction is huge and will definitely cause a sensation in the four markets in Hong Kong and cause small fluctuations in the stock market.

Shen Bi was also shocked by this grand plan. If Liu Zhicheng's plan came into effect, each of his companies would have its own responsibilities in the future. Hutchison Whampoa would specialize in terminal properties, while Whampoa Group would specialize in real estate business.

Liu Zhicheng ignored Shen Bi's thoughts and continued, "Of the 25 billion Hong Kong dollars in funds of the Whampoa Group, 20 billion Hong Kong dollars needs to be borrowed from HSBC. After Wharf Holdings gets the funds, it will acquire Felixsto Port and take the first step towards internationalization."

Shen Bi listened and nodded, completely convinced by Liu Zhicheng's plan. He just asked, "Mr. Liu, how much debt does Huangpu Group have now?"

"The total debt of the Whampoa Group is now HK$4 billion, excluding the HK$13.5 million loan to the Sail Hotel, and the group has HK$ billion in cash on its books."

"The current market value of Whampoa Group has reached 60 billion. Even if an additional 20 billion loan is added, the total debt is only 43 billion Hong Kong dollars. If the cash on the account is deducted, the debt is only % of the market value."

“Moreover, the acquisition of Harbour City is good news for the Whampoa Group, and its fixed assets will increase exponentially.”

Shen Bi thought for a moment and asked, "Mr. Liu, this is negative news for Wharf."

"Mr. Shen, out of the 20 billion Hong Kong dollars, I will take out 2 million Hong Kong dollars as dividends, and will announce our entry into overseas markets at an appropriate time." Liu Zhicheng introduced his plan.

Although the good news will definitely cause investors to sell, Liu Zhicheng is already prepared for a drop in the share price of Hutchison Whampoa.

After thinking for a moment, Shen Bi nodded and said, "Mr. Liu, HSBC agrees to provide loan support."

After dealing with Shen Bi, Liu Zhicheng still had to convene a group coordination meeting, and then convene the board of directors for approval. Only after the board of directors approved it could it be announced to the public.

After Liu Zhicheng dealt with Shen Bi and saw him off, he immediately moved to the conference room and convened a meeting of the management of the Whampoa Group and the Whampoa Group.

Those attending the meeting today included Tony Danker and Yuan Tianfan from Wharf Group, Hao Qingwen from Whampoa Group, and two assistants, Han Chunxi and Cherie Chung.

The theme of today's meeting is a briefing, so that everyone can be mentally prepared and support their own ideas and personnel appointments after the reorganization in the board meeting.

(End of this chapter)