Chapter 184 Strategic Planning of CLP
The market capitalization ranking of the Hang Seng Index constituent stocks clearly reflects the capital structure of the Hong Kong market at this stage.

Among the top ten most influential Hong Kong companies, only three are Chinese-owned: Whampoa Group, China Light and Power Company, and Cheung Kong Company; the remaining seven are British-owned.

In fact, the Whampoa Group was taken away by Liu Zhicheng from the British-owned Clifton family, and China Light and Power was taken away by Liu Zhicheng from the British-owned Kadoorie family.

If Liu Zhicheng had not been reborn and flapped the wings of the butterfly, the Yangtze River Company would be the only Chinese-owned enterprise among the top ten enterprises.

Liu Zhicheng's rebirth has reversed the current scale comparison between Chinese and British capital.

Liu Zhicheng also has several unlisted subsidiaries, and the profit levels of these subsidiaries are not low, even exceeding those of Whampoa Group and China Light and Power.

But does this mean that Liu Zhicheng’s companies can run rampant in Hong Kong and compete with the entire British-owned enterprise?
It is still not possible at the moment. The power of British capital is still very strong. We have to wait until after the next real estate crisis.

Because these British companies will transfer part of their assets and start betting on both ends.

You should know that among the current 33 Hang Seng component stocks, the Jardine Matheson Group includes Jardine Matheson & Co., Jardine Securities and Hong Kong Holdings.

The total market value of these three Jardine Matheson companies easily exceeds HK$10 billion.

There are also three companies from the Wheelock Group on the list, namely Wheelock Holdings, Wheelock Shipping and Heung Kong Property Trust, with a total market value of over 10 billion.

If companies other than Hang Seng Index components are included, Henderson Land Development controls a total of eight listed companies, which makes it very powerful.

Although only one company, Swire Pacific, made the list, its Cathay Pacific Airways is not listed.

Cathay Pacific monopolizes the aviation industry in Hong Kong and overseas, with annual profits comparable to those of Hong Kong Electric. Once listed, the market value of the Swire Group will be no less than that of the Wheelock Group.

Don't underestimate them. Just the three major trading companies, Jardine Matheson, Wheelock and Swire, are all century-old companies.

The industries in Hong Kong are only a part of them. Their base is in the British Empire, where they also have rich industries. Their overall strength may exceed that of Shanfeng Investment.

Among the top ten companies in the Hong Kong stock market, there is also a giant company: Hong Kong Telephone Company.

The telephone company is also a monopoly enterprise, monopolizing Hong Kong's home telephone, telegraph and international telecommunications services.

The shareholder behind the scenes is Cable & Wireless, a giant company that never sets.

Da Dong is listed on the British Stock Exchange. If it were to move its registration to Hong Kong, its strength would definitely not be much worse than the three major trading companies of Jardine Matheson.

On the contrary, HK Electric has always been deeply rooted in the local market and has no actual controller. It is a pure public company.

This company supplies electricity to Hong Kong Island, so the land for power plants it reserves is extremely valuable. If it is managed well, its market value can be comparable to that of China Light and Power.

However, it is currently in a state of turmoil. Jardine Matheson Land has noticed its value and is making every effort to acquire it.

If there are no major changes, according to the development of past history, Jardine Land will complete actual control of HK Electric this year.

If Chinese capital can take over HK Electric this time, the gap between Chinese capital and British capital in Hong Kong will be further narrowed.

To be honest, Liu Zhicheng was very interested in HK Electric, but due to the restrictions of Hong Kong government laws, he was unable to get involved in the transaction and had to give up.

Liu Zhicheng now has sufficient funds, and his strategy company, Shanfeng Investment, has reserved a large amount of cash.

No matter what project he takes a fancy to in the future, there will be no shortage of capital investment, so he does not need to call on the capital reserves of his listed companies.

He decided to keep all the reserve funds in the company to use them to rescue the market during the real estate crisis and to expand overseas business to expand its scale.

"Tony, how is the construction of Shekou Port going now?" Liu Zhicheng asked.

Liu Zhicheng is still quite concerned about the first port he invested in on the mainland. The success or failure of Shekou Port is related to future investments in mainland ports.

"Mr. Liu, the construction of Shekou Port is almost complete and we are expected to be able to cut the ribbon in May," Tony Dank reported.

"Yes." Liu Zhicheng nodded and continued, "Last year we acquired the Felixsto Port Terminal. Entering the overseas port business is the development direction of Wharf Holdings.

China Power now has a power plant in New Zealand, and this region will become our priority investment target.
Next, you can go with me to inspect the port conditions in New Zealand. If there are suitable investment projects, make an investment plan and submit it to me for approval."

"Okay, Mr. Liu." Tony Dank nodded.

Liu Zhicheng thought of another big project, which was the Yantian Port in Pengcheng City. In 1983, Pengcheng City began to submit reports and request permission to build a deep-water port.

And it seems that a loan of R yuan was used, and now there should be a preliminary construction intention. Can I steal the love away?
"Shekou Port is now completed. Tony, you should go to the mainland more often to see if there are any ports we can invest in.
As far as I know, Pengcheng may have a large port plan. Please arrange for someone to go and find out if you can get a share."

Hutchison Whampoa's overseas investment is mainly in port business, and it is impossible for Liu Zhicheng to give up port investment in the mainland.

Although Liu Zhicheng didn't know much about port construction, since he had the special ability of "prophet", he could still give them some guidance.

After Liu Zhicheng finishes dealing with the affairs of Hutchison Whampoa, he will start to deal with the integration of China Light and Power.

China Power will definitely invest in overseas power markets and the mainland market, and will definitely develop clean energy in the future: wind power and nuclear power.

This was also the development path of China Power in its previous life, and Liu Zhicheng just had to copy it.

"In 1981, China Light and Power's total operating revenue was HK$38.5 billion, with a net profit margin of 18.4% and a full-year profit after tax of HK$5.7 million."

Yuan Tianfan was reporting to Liu Zhicheng. He had been working at China Light and Power for more than half a year and had already mastered the work situation.

In fact, the business of this company is relatively simple, and it only focuses on three official duties: maintaining the operation of power plants, the smooth operation of transmission networks, and serving electricity users.

In view of Hong Kong's rapid economic development, the electricity consumption of urban enterprises and residents increases every year, and investment in power plants is also essential.

Yuan Tianfan continued, "After we took over the board of directors last year, we had a surplus of about HK$1 billion, which was the profit when the Kadoorie family was in charge.
However, we still have some debts with banks, and our debt ratio is relatively high. After paying off some of the due debts, the remaining funds were all invested in the power plant.”

Liu Zhicheng nodded, tapped the table with his fingers, thought for a moment and said to Yuan Tianfan: "China Power will start the reorganization from now on to form the China Power Group, which will hold China Power Hong Kong (listed entity), China Power Overseas, and China Power Energy Infrastructure Company.

We started to take over assets from Pacific Power Company. The three Xiangjiang power plants originally belonged to China Light and Power. We only needed to go through one procedure and did not need to transfer any personnel.
But the power plant and distribution network in Porirua, New Zealand, is an independently operated company overseas, and you need to send someone to take over as soon as possible.”

In the transfer agreement signed by Liu Zhicheng and Exxon, they transferred all the assets of the three power plants in Hong Kong and New Zealand to Pacific Investments.

The Hong Kong power plant itself is managed by China Light and Power, but the employees of the New Zealand power plant have no relationship with China Light and Power, so they must establish a relationship. The reorganization of China Light and Power is first to reorganize the Hong Kong part, and second to reorganize the New Zealand power plant.

Liu Zhicheng continued slowly: "China Light and Power Company supplies electricity to one million households in Hong Kong. The income is very stable and the profit is also quite lucrative.

But the board of directors of China Power has never expanded its business overseas, and the dividends paid to shareholders over the years are not much. "

Hong Kong citizens use electricity every day. The electricity bills of millions of households alone are astronomical. Add to that the industrial electricity consumption of public facilities and commercial institutions in Kowloon and the New Territories, and the annual profit is conservatively estimated to be hundreds of millions of Hong Kong dollars.

Otherwise, the market value would not have reached more than 5 billion Hong Kong dollars. However, China Light and Power has been holding on to the Hong Kong market for nearly a century, not to mention the distant European and American regions, and even the nearby Macau power market has not been able to enter.

The annual electricity profit is so huge, but the dividends are not much. Where does the money go?

The Kadoorie family's method of making money was simple: they often added facilities to power plants.

There are three power plants in Hong Kong. As Hong Kong's economy takes off, the annual demand for electricity increases by at least 10%.

The power generation capacity will certainly increase, so they frequently issue notices that their power plants cannot cope with the load.

A few years ago, Liu Zhicheng's Yuen Long Industrial Park was cut off from electricity because the overload was used as an excuse to limit electricity and sales.

The construction cost of a power plant is very high, often hundreds of millions of Hong Kong dollars or hundreds of millions of US dollars.

When Exxon entered Hong Kong, it invested in a power plant with a disclosed cost of up to 10 billion US dollars, and that was the price in the 1960s.

After entering the 1980s, the cost of power plants in cities was calculated in the tens of billions.

So although China Light and Power has high profits, the investment involved in the construction and maintenance of power plants is also quite staggering.

During this operation, the Kadoorie family can allocate China Light and Power's reserve funds at will.

It is unclear how much was used for the company's business and how much went into personal pockets.

Now that Liu Zhicheng has taken over China Light and Power, his business philosophy will definitely not be as conservative as that of the Kadoorie family.

After ensuring that China Light and Power's annual profits are sufficient to meet Hong Kong's growing electricity demand, he will invest the remaining reserves in overseas electricity markets.

The New Zealand power plant is just the first step overseas.

"China Power has been operating in Hong Kong for nearly a hundred years. The local power plants and transmission network are already very mature. We are fully capable of expanding overseas and expanding our scale.
Once you are familiar with the work, you will do infrastructure planning, focusing on power plant energy infrastructure, transmission line infrastructure, port power infrastructure, transportation power infrastructure, and building power infrastructure. "

After hearing this, Yuan Tianfan said casually, "Qingzhou Yingmu has an infrastructure department, which is mainly engaged in buildings, ports and transportation. Can we acquire Qingzhou Yingmu's infrastructure department?"

"I am only an indirect shareholder of Qingzhou Yingni. You should go and discuss this matter with Mr. Lu. It is a win-win situation for both sides. I think Mr. Lu will be willing to cooperate with you."

"Okay, Mr. Liu."

"Energy prices are rising, and the cost of power generation in Hong Kong is getting higher and higher. Haven't we already been connected to the mainland power grid?

What I mean is, can we buy electricity from the mainland to supply Hong Kong, thus reducing our investment in power generation in Hong Kong?"

"Mr. Liu's plan is a good one, but there is also a shortage of electricity supply in the mainland now." Yuan Tianfan said with a frown.

Yuan Tianfan did not understand Liu Zhicheng's intention. In his previous life, Hu Yingxiang had built many thermal power plants in the mainland.

Moreover, in its previous life, CLP also invested in clean energy and hydropower stations in the mainland. And Daya Bay nuclear power is exclusively supplied to Hong Kong.

In the past, Guangdong Nuclear Power and China Power jointly built and operated Daya Bay Nuclear Power Plant, and 80% of the electricity generated was supplied to Hong Kong.

The power station was started to be constructed in 1987 and put into operation one year later. It is the first large-scale commercial power station in the mainland.

It is also the first nuclear power plant in the mainland built with foreign technology and funds, and its influence is far-reaching.

"If they lack electricity, you just go and build it. Doesn't that solve the problem?" Liu Zhicheng said with a smile.

After hearing the boss's instructions, Yuan Tianfan's eyes lit up, and he felt as if the fog had been cleared and the sun had been shining. He also smiled and replied, "Okay, Mr. Liu."

Building power plants in the Mainland saves money than in Hong Kong, mainly in terms of labor costs, land costs and energy costs.

Moreover, once the land of Xiangjiang Power Plant is replaced, it will be another gold mine and will generate huge profits in the real estate market.

“For investment in the mainland power market, you must also send an investment inspection team to strive for greater victory as soon as possible.”

"For other clean energy sources, you should also form a team to follow up and try to understand them as soon as possible, and invest in and develop them when appropriate."

Clean energy includes wind energy, solar energy, ocean energy, hydropower, bioenergy, geothermal energy, nuclear energy, etc.

In his previous life, Liu Zhicheng certainly knew how big the market for these energy sources was, so he made special instructions to Yuan Tianfan.

This is the long-term development plan of China Power. Yuan Tianfan only needs to follow this direction and move towards victory.

Unlike Hutchison Whampoa, which has a relatively simple business, only one terminal business.

This time, Liu Zhicheng discussed with Yuan Tianfan for two days, all of which were matters related to the restructuring and development of China Power.

In the future, China Light and Power will be a comprehensive company that invests in global energy, involving power generation, transmission, new energy development, and various power-related infrastructure businesses.

Liu Zhicheng is very concerned about the development of China Power because he knows the future market.

Next, after arranging the work of his subsidiaries, Liu Zhicheng prepared to face the storm.

After this, Liu Zhicheng will be a hands-off boss in the real estate and port businesses, as these industries will usher in a decades-long upward channel.

As long as they move forward in the direction Liu Zhicheng has assigned, they will move from one victory to a new victory.

Liu Zhicheng will concentrate on developing his industrial and electronic technology businesses, and strive to make greater contributions to the long-term development of Hong Kong.

(End of this chapter)