lcionline Chapter 588 9 Dragon Warehouse
Chapter 588 9 Dragon Warehouse
Lu Ye has been in business for many years. In order to understand the stock market, he even hired a professional team at a high price to teach him stock market knowledge.
One of the courses is about the two core issues of stock selection and valuation.
At that time, the teacher gave Lu Ye a very detailed explanation using the Wharf Group acquisition case.
In Hong Kong in the 70s, the British banks with the strongest capital were Jardine Matheson, Swire, HSBC and Hutchison.
Among them, Jardine Matheson Group is the major shareholder of Wharf Holdings.
Although the main business of the Hutchison Whampoa Group is its docks, it also owns a large amount of high-quality land.
Among them is a piece of land controlled by Hutchison Whampoa, which is located in the most prosperous prime location in Kowloon.
Li Chaoren was doing very well in real estate. After calculation, he found that the auction price of this piece of land at that time was between HK$6000 and HK$7000 per square foot based on the auction price of government land in the same area.
According to the think tank's calculations, the actual stock value of Wharf Holdings, the land holder, should be no less than HK$50 per share in the US.
However, the share price of Hutchison Whampoa at that time was only HK$13.4 per share.
This made Li Chaoren see a huge opportunity.
So Li Chaoren decided to use the funds of Changjiang Industrial to acquire the Wharf Group!
In order to achieve the effect of concealment and surprise, Li Chaoren sent people to build positions in a dispersed manner and secretly purchased a large number of Hutchison Whampoa shares.
This action also caused the share price of Hutchison Whampoa to soar from HK$13.4 to over HK$50 in just a few months.
The rapid rise in Wharf Holdings' stock price also made the Wharf Group feel uneasy, so it began to deploy a counterattack.
However, due to the impact of the oil crisis, the funds available to the Wharf Group, which mainly engages in terminal business, are very limited.
They can only buy stocks from some retail investors, which is simply a drop in the bucket to cope with Changjiang Industrial's acquisition.
In desperation, Wharf Holdings finally turned to Huifeng Bank for help.
Huifeng Bank directly found Li Chaoren. Li Chaoren had a very close relationship with Huifeng Bank. Faced with Huifeng Bank's mediation, Li Chaoren had to give face.
As a result, at this time, another big family that secretly acquired Hutchison Whampoa surfaced.
The shipping magnate Pao family was eager to transform the family business and also had their eyes on the land held by the Wharf Group. Their determination to acquire it was even greater than that of Li Chaoren.
So after several rounds of negotiations, Li Chaoren finally agreed to transfer all of his Hutchison Whampoa shares to the Bao family, and then withdrew from the fight.
With this transaction alone, Li Chaoren made a net profit of 5900 million Hong Kong dollars.
In addition, the Bao family also transferred their shares in another old British trading company, Hutchison Whampoa, to Li Chaoren, which laid the groundwork for his future acquisition of Hutchison Whampoa, a Fortune 500 company.
In this acquisition, although Li Chaoren failed to successfully acquire Hutchison Whampoa, he actually became the biggest winner.
On the other hand, although the shipping magnate Pao family finally succeeded in taking over Hutchison Whampoa, it was a miserable victory. In this battle, the shipping magnate Pao family directly lost 6 million Hong Kong dollars!
In this case, stock selection and valuation are the core issues.
The main reason why Wharf Holdings’ stock price is so low is that the valuation direction is wrong.
Li Chaoren calculated the valuation of Hutchison Whampoa based on the huge future appreciation of the real estate business, and he was interested in the land controlled by Hutchison Whampoa.
Of course, these issues are actually not that important to Lu Ye at the moment.
The only important thing is that Lu Ye is very clear that the upper limit of Hutchison Whampoa’s stock is far from the current HK$15.1!
Lu Ye remembered clearly that Li Chaoren quietly left the market at HK$13.4.
The current price is HK$15.1 per share, which means that Superman Li has only just entered the market not long ago.
"This is an opportunity!"
Thinking of this, Lu Ye's eyes suddenly lit up.
After casually strolling around this company of only a dozen square meters, Lu Ye asked Pang Feng to continue his work, and he left with Shu Wen and Su Yunjie.
Sitting in the car, Lu Ye kept thinking in his mind how he could get a large sum of money in the shortest time.
"Shu Wen, can you help me contact the bank? I want to use the farm shares as collateral and bring in some money."
In the car, Lu Ye said something shocking.
"You want a loan?"
"What do you want so much money for?" Shu Wen asked in confusion.
"I think it's a bit of a waste to leave the company empty. I plan to set up an investment department and use the loan money for investment." Lu Ye replied.
After hearing what Lu Ye said, Shu Wen felt that Lu Ye's idea was really unrealistic.
Not to mention that it is a shell company, and all the staff added up are only Lu Ye and Pang Ze.
Just to say that Lu Ye doesn't understand Hong Kong's financial environment at all, yet he dares to rashly get involved in investment. What's the difference between this and throwing stones into the water?
Shu Wen was amused by Lu Ye's wild ideas.
Shu Wen even felt that Lu Ye was joking with her.
"Mr. Lu, investing is risky. You need to be cautious when entering the market. I advise you to forget it."
"Besides, you won't be staying in Hong Kong for too long. Who are you going to let handle the investment? Pang Ze? If he, a salesman, tries to invest, it would be strange if he doesn't lose all your money."
Shu Wen dissuaded Lu Ye in a relatively tactful way.
However, Lu Ye, who had already made up his mind to take advantage of the opportunity to make a fortune, would never let such a good opportunity slip away from him.
"That's easy. I'm going to do it myself and test the waters in the Hong Kong stock market."
"Don't try to persuade me anymore, I've already made up my mind."
Lu Ye's attitude was firm.
This made Shu Wen feel a little embarrassed.
She was not embarrassed about helping to contact the bank, but Shu Wen was worried that by helping, she would become an accomplice in Lu Ye's huge losses.
But seeing Lu Ye's determination to do this, Shu Wen had no way to refuse him.
After thinking about it, Shu Wen came up with a solution.
Since Lu Ye wanted to test the stock market, he might as well lend him some money. Even if he lost it all, it didn't matter.
It's better than using shares as collateral and then having them taken away by the bank.
"How much money do you plan to borrow?" Shu Wen asked.
"Of course the more the better. It depends on the bank's evaluation. My expectation is at least two million Hong Kong dollars." Lu Ye said after thinking for a while.
Su Yunjie was sitting in the front and was completely stunned by what he heard.
"Brother-in-law, are you crazy? Two million! What if you lose it?"
Shu Wen also felt that Lu Ye's idea was a bit too crazy.
If she wants to transfer so much money, she must get the consent of her father or grandfather.
"this..."
"Let me try to contact them for you first. The farm is a mainland enterprise after all, and I'm not sure whether banks in Hong Kong would accept it as collateral."
Shu Wen found an excuse to put Lu Ye off.