Chapter 500: Chapter 488: Even the Wealthy Third Generation Faces Difficulties Chapter 500: Chapter 488: Even the Wealthy Third Generation Faces Difficulties Wansheng Real Estate acquired land worth over 8 billion in one go, and then its investnt departnt continued to follow up on two old buildings and three plots of land.
According to the financial report of Wansheng Real Estate (a listed company, hence financial transparency), this obviously exceeded their cash flow.
Father Hu was puzzled and called Hu Zhifeng over to ask, “The funds that Wansheng Real Estate retracted before the stock market crash, a portion of which was used to repay bank debts, with just over ten billion in cash flow on their books, how did they co up with so much money to buy land?”
Hu Zhifeng didn’t know either and said, “I chatted about this with Nie Zhan while playing golf two weeks ago; he said they didn’t have enough funds on the books, otherwise they could have stockpiled more land when the opportunity arose.”
Yet Wansheng Real Estate’s recent major moves didn’t seem indicative of a cash squeeze. However, having known Nie Zhan for over a decade, it seed unlikely that he would deceive him, and there was no need for that either.
Seeing that Hu Zhifeng was also in the dark, Father Hu said, “Next month there’s a land auction in Tsim Sha Tsui, invite him for dinner and feel him out to see if he’s also intending to bid.”
He too wanted to stockpile more land, but the recent stock market crash had caused the company’s stock price to fall a lot, and he was planning to buy back so of the shares. Moreover, since he had set his sights on the land in Tsim Sha Tsui a while ago, the company needed to retain so liquidity, so stockpiling land on the sa scale as Nie Zhan was impossible. Besides, that would be too risky; if the real estate market fluctuated greatly, even the monthly interest paynts would pose a large problem.
“Okay.”
Hu Zhifeng returned to his office and called Nie Zhan to arrange a ga of golf for the weekend.
Nie Zhan, with a laugh, said, “Do you have ti tonight? I heard Good Fortune Here has so new dishes. Feng Qing Lei went and said the food was excellent, shall we try it out tonight?”
Hu Zhifeng was surprised and asked, “Dinner tonight? Aren’t you supposed to be accompanying Miss Lu tonight?”
Ever since Nie Zhan began dating, it had beco difficult to arrange a et-up with him. Only because his wife had developed a good relationship with Lu Jiaxin, and they all agreed to gather together, did they start seeing each other more often.
Nie Zhan was surprised, apparently not aware that Jiaxin was not in Hong Kong, which suggested that Zong Shing hadn’t been in contact with Jiaxin for so days. He explained, “Jiaxin had to go back to the Mainland for sothing and won’t return for a few days.”
Hu Zhifeng then understood why he was available to go out, “My eldest took a fall and injured his foot half a month ago; last week my youngest caught a cold and had a fever. Now that both kids are well, my sister-in-law has fallen ill from the stress.”
Nie Zhan said, “Jiaxin probably left in a hurry and forgot to tell your sister-in-law.”
Hu Zhifeng chuckled, “Or maybe my sister-in-law was too busy and forgot to ntion it to . Ah Zhan, shall we invite Tao Yong and Fu Ye?”
Nie Zhan replied, “Tao Yong is probably not in the mood right now, let’s not bother him. Fu Ye has a fiancée now, let’s not disturb him and risk his fiancée coming over again and spoiling our al.”
Nie Zhan didn’t make an issue out of the fact that Lu Jiaxin hadn’t complained to him after the last incident. He certainly didn’t expect that one ti, while they had arranged to play tennis together, the woman turned up and the two had an argunt.
Over dinner, Hu Zhifeng remarked with a smile on the size of Nie Zhan’s recent transactions, “Ah Zhan, you really are bold, snapping up so much land like that. I also wanted to stockpile so land, but my dad said it was too risky and refused.”
There was a hint of frustration in his words. He trusted Nie Zhan’s judgnt that Hong Kong’s property market would continue to boom, and that it was an opportune mont to acquire more land. However, his father had refused, citing the company’s lack of cash flow. In reality, it wasn’t that the company didn’t have the cash flow, but rather his reluctance to have the company carry too high a leverage ratio. While Nie Zhan’s company’s highest debt ratio reached 68% and is now at 45% after partial repaynts, their company always maintained a leverage ratio of around 35%.
Wansheng Real Estate’s market value had more than doubled in two years due to Nie Zhan’s bold and aggressive actions, while their family’s real estate company had only increased by 40% in a bit over two years. If things continued like this, the gap would only widen.
Nie Zhan said, “My grandfather is the sa, conservative. The company’s two rights issues for fundraising in the year before last and last year, he was against them, deeming them too reckless. It’s a good thing that when he wanted to take over the company, I insisted on transferring all the shares to my na. Otherwise, I would have been constrained.”
With the shares in his hands, the old man’s opposition was futile, and the company proceeded according to the developnt plan he had set. However, seeing how well Wansheng Real Estate was doing, and that he was also involved in hotels, jewelry, and apparel, the old man had completely let go. He no longer interfered with the company’s rights issue for capital raising in September this year.
Hu Zhifeng, with a smile, changed the subject, “Let’s not talk about that. Ah Zhan, the governnt is auctioning off the land in Tsim Sha Tsui next month. Are you planning to participate in the bidding?”
Nie Zhan nodded and revealed, “Xinxin Real Estate will participate in the bidding, but Wansheng Real Estate will not.”
It was not that he didn’t want to participate, but he was out of funds and despite the will, he was powerless. Fortunately, Jiaxin had ample funds, and Xinxin Real Estate should be able to secure the land.
Hu Zhifeng was taken aback, “What did you say? Xinxin Real Estate is going to bid? Their main business is leasing; they don’t have the capability to develop properties.”
Nie Zhan revealed with a smile, “Xinxin Real Estate will acquire the land and then collaborate with Wansheng Real Estate for developnt.”
Hu Zhifeng, recalling a previous comnt from Nie Zhan, suddenly understood, “Miss Lu ntioned to Shing before that she made 79 million in the stock market; it’s more than that amount, isn’t it?”
Lu Jiaxin’s fortune was tied up in several companies; having a cash flow of a billion or two was already impressive. The only possibility for such a major investnt now was that, like Su Heyuan, she had made a substantial profit in the stock market.
Nie Zhan naturally wouldn’t expose Jiaxin, “She did earn that amount from stock investnts, but she also mortgaged the stocks of several companies, including Wansheng Real Estate, to secure loans and used that money to short the Hang Seng Index.”
Hu Zhifeng, a worldly man, was still astounded by the news, “Shorting the Hang Seng Index? That would an a huge profit.”
“Yes, it was more than a fourfold gain.”
Hu Zhifeng felt a little unsteady; a fourfold gain ant that even if she had taken out a mortgage loan of four to five billion, she would have earned over twenty billion. With such a significant influx of cash, no wonder they could buy so much land.
Being from a third generation of wealth and having weathered many storms, Hu Zhifeng quickly regained his composure, smiling and saying, “Ah Zhan, such a major developnt and you didn’t even ntion it to ?”
Nie Zhan expressed helplessness, “I was strongly against her doing this, but she insisted on buying regardless.”
“You disagreed?”
Nie Zhan confird that he hadn’t invested a single penny, “I had the money ready, waiting for her to go bankrupt so I could buy back the shares of Wansheng Real Estate.”
Hu Zhifeng then realized, “So you’re saying, Heyuan followed Jiaxin’s lead in buying?”
Nie Zhan didn’t hide the truth, “Su Heyuan felt that Jiaxin was lucky with money, so he follows whatever she buys. Last ti with the foreign exchange, he followed her as well. Though that ti, Jiaxin made the purchase based on my recomndation. This ti, it was her own decision to take the risk, but she has agreed not to be so impulsive in the future.”
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