In Hong Kong, we build a global business empire

Chapter 729 Li Ka-shing is about to collapse!
After the engagement banquet, according to tradition, the couple will live separately until they are officially married.

However, neither the Lin family nor the Guo family cared about the constraints of these traditional customs.

After all, the Guo family made their fortune in Southeast Asia, a melting pot of cultures.

Lin Haoran, having traveled from decades in the future, was even less concerned about these rules and regulations.

Cohabitation before marriage is a very common and normal thing, even in Hong Kong today.

This is more a matter of mutual consent between the man and woman.

Neither the Guo family nor the Lin family would interfere in the lives of this young couple.

The day after the engagement banquet, Lin Haoran personally drove to the villa where Guo's parents were temporarily staying on Barker Road to pick up Guo Xiaohan.

Both parties had discussed this matter beforehand, and Mr. and Mrs. Guo were happy to see it happen.

In the eyes of both sets of elders, young people have their own way of life.

Before leaving, Guo's mother carefully instructed: "Xiaohan has been spoiled by us since she was a child. If she does anything wrong, Haoran, you must be more tolerant of her."

Mr. Guo also spoke up, saying, "We've been in Hong Kong for a while now, and we'll be going back to Southeast Asia in a couple of days. The next time we meet will probably be at your wedding. I was a little worried about Xiaohan living here alone before. I'll feel much more at ease if you bring Xiaohan to live with you!"

Lin Haoran solemnly promised, "Uncle and Aunt, please rest assured, I will take good care of Xiaohan!"

The official wedding date has been carefully selected by a feng shui master based on the birth dates and times of the bride and groom. It will be the 2rd day of the first lunar month next year, which is February 16, 1982 in the Gregorian calendar. This day is the auspicious day for them to hold their wedding banquet and tie the knot.

Compared to a low-key engagement party, the wedding banquet will be much grander.

Not only will all relatives and friends from both sides be invited, but also celebrities and dignitaries from Hong Kong and Southeast Asia will be invited to a banquet.

As for their marriage certificate, they planned to get it two days early, which happened to be Valentine's Day. This arrangement would undoubtedly add a romantic touch to Guo Xiaohan's life.

Upon hearing her father's words, Guo Xiaohan's eyes flashed with a hint of reluctance, but it was quickly replaced by happiness.

She whispered to her parents, "Don't worry, Daddy and Mommy, I'll take good care of myself. And with Haoran here, you don't need to worry."

Lin Haoran considerately took Guo Xiaohan's luggage and assured Guo's parents, "Once I'm done with this busy period, I'll take Xiaohan back to Southeast Asia to visit you both."

And so, Guo Xiaohan moved into the villa on Shi Xun Road with several suitcases.

In the past, she would occasionally come here, and even stay overnight.

But things are completely different now. Her arrival this time means that Shi Xundao Villa has gained a new female owner.

The villa exudes a festive atmosphere of a new home.

The servants lined up neatly, respectfully welcoming the new mistress of the house.

"Welcome home, madam," the butler led everyone in a bowing greeting.

Guo Xiaohan felt a little embarrassed by the formality and whispered to Lin Haoran, "Actually, it doesn't have to be so formal."

Lin Haoran smiled and squeezed her hand: "This is the respect you deserve. From today onwards, you are the mistress of this place."

……

In the blink of an eye, a week has passed, and it's now September 14th.

During this week, Lin Haoran and Guo Xiaohan's engagement was kept quite low-key and therefore did not become public knowledge.

Lin Haoran did not plan to announce his marriage before it was officially announced, otherwise it would have caused quite a stir.

During this week, apart from the two major supermarket giants continuing their price war, nothing much else happened.

The price war between the two giants, which began on the 30th of last month, has lasted for a full two weeks.

The happiest people are none other than the ordinary citizens of Hong Kong.

Because Hong Kong is a small city, most of its goods need to be imported, so prices are inherently very high.

However, in the past two weeks, prices have been directly reduced by nearly 30% by the two major supermarket giants.

Many citizens took advantage of this opportunity to purchase large quantities of daily necessities. The nearly seventy chain stores of the two major supermarket giants provided citizens with a shopping feast.

The headquarters of Hongkong Land Group, Kang Le Building, 51st floor, President's Office.

Looking at the report handed over by Huikang Supermarket, Ma Shimin smiled knowingly.

In just half a month, Wellcome Supermarket's turnover increased by a staggering 382% compared to the previous half month!

Wellcome Supermarket has 39 chain stores in Hong Kong.

而从8月30号促销活动开始，到9月13号，刚好15天时间，这39家连锁门店的总营业额达到了恐怖的3.614亿港元！
In other words, on average, each chain store generated approximately HK$926.67 million in revenue during this two-week period, which is nearly HK$10 million.

That's almost half a month!
This data is alarming, especially considering that over two hundred products have seen price reductions of 30%.

If this had happened a month ago, with the same cost, Wellcome Supermarket would have lost at least tens of millions of Hong Kong dollars selling this much!
In a price war, the more you sell, the more you lose!
Although other products that weren't on sale also sold quite a bit, consumers are savvy, and the ones that sold out the most were definitely the heavily discounted items.

However, since most of these 200 promotional products are fast-moving consumer goods produced by Longway Group, a subsidiary of Hongkong Land Group, and both Wellcome and Longway Group belong to the same group, they already offer significant discounts.

In addition, many products were put into production in Shenzhen at the beginning of this month, which further reduced costs due to raw materials, labor costs, and transportation costs.

Despite a 30% price reduction on over 200 essential consumer goods, Wellcome Supermarket not only avoided losses but actually made a profit after deducting estimated costs!

This promotional campaign generated HK$3.614 million in sales. After deducting all costs, the net profit margin was approximately 6%, and the profit over the past two weeks was close to HK$2200 million!
These figures are based on past expenditures and are calculated after deducting approximate costs.

HK$2200 million may not seem like much, but if you look at it from a different perspective, once Wellcome's promotional period ends and prices return to normal, Wellcome's profitability will increase significantly.

The more Ma Shimin looked at it, the more satisfied he became.

"The boss's decision to have Dairy Farm International acquire the fast-moving consumer goods brand was a brilliant move!" Ma Shimin murmured.

If we hadn't entered the fast-moving consumer goods sector in the first place, this price war with ParknShop would have definitely burned through a lot of money.

Although Hongkong Land Group is now financially strong and has ample funds, and may not lose money, who would want to lose money?

"I wonder what the situation is like at ParknShop supermarket. I wonder how much money they've lost in the past two weeks, and how long they can hold on?" Ma Shimin said with interest.

While Ma Shimin was thinking about ParknShop supermarkets, a high-level meeting was being held at Hutchison Whampoa Building, just a few hundred meters away.

Inside the meeting room, Li Jiacheng sat in the main seat, and the atmosphere in the entire meeting room was somewhat strange.

At this moment, no one looked happy.

After all, ParknShop's forced entry into the price war ultimately hurts the entire Hutchison Whampoa.

“Mr. Richard, tell me about the current situation of ParknShop supermarkets!” Li Jiacheng looked at the CEO of Hutchison Whampoa sitting next to him and said in a deep voice.

"Okay, Mr. Li, since the 30th of last month, our ParknShop supermarket's turnover has increased by more than 450% month-on-month. However, according to our finance department's calculations, ParknShop supermarket has suffered a staggering loss of HK$6800 million in the past two weeks."

Although the supplier's payment has not yet been due, we will have to pay the supplier sooner or later, so this loss of HK$6800 million is a real loss! Richard reported with a solemn expression.

They did try to get suppliers to share the burden and reduce procurement costs, but the suppliers' profits were already low, so where could they get them to lower prices?
Moreover, this price war by ParknShop may last for more than a month.

Even the wealthy and powerful Huang family might not be able to afford to burn through that kind of money, let alone fast-moving consumer goods companies like theirs, which don't have high profit margins to begin with.

Ultimately, Hutchison Whampoa will have to bear more than 90% of the losses from this price war!
A collective gasp filled the conference room.

One director couldn't help but exclaim, "6800 million? And that's only been half a month! If this continues, won't we be losing 1.5 million a month?"

Richard nodded gravely: "Yes, and according to forecasts, if the price war continues, next month's losses could exceed HK$1.5 million. More seriously, our cash flow is already starting to tighten."

Li Jiacheng's face turned extremely grim: "How's the situation at Huikang?"

The reason for such severe losses is clear to everyone present, including senior executives at Hutchison Whampoa.

But this result is hard for them to accept.

“Mr. Li, we have investigated Huikang Supermarket. Their daily foot traffic is no less than that of our ParknShop Supermarket, and they also have more storefronts. Logically speaking, they should be losing more money.”

In reality, they may not have lost too much money. The reason is probably clear to everyone: their company, Langwei Group. This fast-moving consumer goods (FMCG) conglomerate has not only acquired many internationally renowned FMCG companies, but also taken over well-known local FMCG companies in Hong Kong. Many of the products displayed on our Baijia Supermarket shelves belong to Langwei Group. What's most outrageous is that since last month, Langwei Group has required cash on delivery for all products they purchase from us, giving us no opportunity to delay payment.

We don't want to continue cooperating with them, but they own too many well-known brands, and we can't avoid them. If we shut out their products, it will have a significant impact on our supermarket.

Our investigation revealed that many of the products imported from Hong Kong by the Langwei Group are no longer imported from overseas, but from Pengcheng in Guangdong Province. They have set up an industrial park in Pengcheng, and since the beginning of this month, nearly 70 kinds of products imported from Hong Kong have come from Pengcheng.

As everyone knows, labor costs, material costs, and land costs are relatively low in mainland China. Therefore, I suspect that their import costs should have decreased significantly. Although I don't know if they are losing money, even if they are, it shouldn't be by much." Richard Shin stated what he knew in a logical and organized manner to Li Jiacheng and all the senior executives present.

Richard's words made everyone present feel uncomfortable.

Both companies are engaging in low-price promotions, but they themselves are suffering unacceptable losses, while their competitors may not be losing much money, or even making a small profit.

This unequal war of attrition has put Hutchison Whampoa in an extremely passive position.

At this moment, Political Director Peter stood up from his seat.

Immediately, everyone present looked at the other party, including Li Jiacheng.

"Mr. Li, and everyone here, I have to tell you something. We have a debt of HK$3.58 million that will be due in less than a month."

As everyone knows, our business situation over the past few months has been that the dock industry, hotel industry, retail industry, etc. have been losing more money than making a profit. If this continues, Hutchison Whampoa will return to the state it was a few years ago, facing cash flow difficulties and on the verge of bankruptcy.

"So I suggest that ParknShop supermarkets should try to stop the price war as soon as possible. We can't hold out for long!" Peter said in a deep voice.

Peter's words were like a bombshell, exploding in the already tense meeting room.

"A debt of 3.58 million? Due within a month? Why didn't the finance department mention it before?" a director exclaimed.

The CFO immediately stood up and explained with an embarrassed expression: "This debt is a short-term bridge loan taken out at the beginning of the year to integrate some of the real estate business. Mr. Li knew about it and originally planned to repay it with part of the sales proceeds from the North Point residential project."

However, the real estate market has been sluggish this year, and sales revenue collection has been far below expectations. As you all know, we are actively communicating with Huifeng Bank to extend the loan period, hoping they can postpone it for a while. But Huifeng Bank, and even Standard Chartered Bank behind it, are not doing well. Even if they want to help us, sometimes they are powerless to do so.

As everyone knows, Standard Chartered Bank paid a high price to acquire Huafeng Bank.

In particular, Standard Chartered Bank has provided HSBC with tens of billions of Hong Kong dollars in advance funding in the past few months. Therefore, it will take Standard Chartered Bank at least two years to recover its strength. By then, HSBC's funds will have gradually been recovered.

However, the financial war that caused a sensation just a few months ago has only recently ended, so both HSBC and Standard Chartered are clearly facing some difficulties.

Normal operations are possible, but it's difficult for them to get customers to delay repayments, because often a single loan can drag down the entire situation.

"Exhibition period?"

Peter Wei's voice trembled slightly. He looked around the conference room, his gaze finally settling on Li Jiacheng, and said, "Mr. Li, HSBC under Shen Bi is now in dire straits!"
Standard Chartered nearly exhausted its liquidity in its acquisition of HSBC, and now more than ever, they need stable cash flow and timely loan repayments. For us to request an extension at this time is tantamount to asking a tiger for its skin!

He took a deep breath and emphasized, "Once the news of Hutchison Whampoa's huge losses and tight cash flow is confirmed and reaches HSBC and Standard Chartered, they will not only not extend the loan, but may even ask us to repay in advance, or even freeze some of our accounts to prevent risks!"

Bankers are always quick to add to someone's success, but slow to offer help in times of need! Especially when they themselves are short of money!

These words were like a bucket of ice water, extinguishing the last glimmer of hope in everyone's hearts.

Li Ka-shing remained silent; he knew better than anyone the current state of Hutchison Whampoa.

Not only Hutchison Whampoa, but even Cheung Kong Holdings is now facing financial difficulties.

In order to acquire a 40% stake in Hutchison Whampoa, he not only drained all of Cheung Kong Holdings' funds, but also used Cheung Kong Holdings to issue bonds, thus successfully and completely taking control of Hutchison Whampoa.

Unfortunately, since the beginning of this year, the real estate industry has stagnated, and sales data for various properties have dropped sharply, resulting in Cheung Kong Holdings' cash collection speed being far lower than expected and its debt ratio increasing.

Meanwhile, Hutchison Whampoa's port, real estate, hotel, and retail businesses, which had been on high hopes, encountered headwinds one after another. In particular, the sudden price war launched by ParknShop supermarkets became the last straw that broke the camel's back.

Li Jiacheng's fingers tapped unconsciously on the table, making a dull "thump-thump" sound that was particularly clear in the otherwise quiet conference room, striking a chord in everyone's hearts.

At this moment, his face was actually more gloomy than that of the high-ranking officials present.

After all, everyone present was just a professional manager.

And he, on the other hand, is a true controlling shareholder.

If the group loses money, the professional managers will at most receive less bonus; they will still receive their regular salaries.

But he invested real money and lost his entire fortune!

Hutchison Whampoa and Cheung Kong Holdings are like his left and right hands. Now, both hands are being held hostage by his cash flow lifeline, causing him immense pain!

He recalled the high spirits he had when he took over Hutchison Whampoa at the beginning of the year, but now, only nine months later, he is already mired in difficulties and struggling to move forward.

The feeling of falling from the clouds made his chest feel tight.

If it weren't for the support of Huifeng Bank, he wouldn't have had the strength to acquire Hutchison Whampoa.

This is why he wanted to latch onto Huifeng, a powerful backer.

But who would have thought that the powerful figure they had tried so hard to curry favor with would be defeated by a younger Chinese man and become a subsidiary of Standard Chartered Bank.

In order to completely control Hutchison Whampoa, he did not hesitate to deeply tie Cheung Kong Holdings to it, and even went so far as to issue high-interest bonds, betting almost his entire fortune.

He thought that with his management skills, he could quickly revitalize Hutchison Whampoa and rebuild a business empire.

For example, he has already planned to level the Huangpu Shipyard in two or three years and build a super-large commercial complex on that land, which will definitely make him a fortune.

But to everyone's surprise, the market environment took a sharp turn for the worse, and Lin Haoran suddenly appeared out of nowhere, using such a ruthless price war to precisely strike at the weakest point of his cash flow!
A year ago, when the real estate market was booming, he could easily mobilize one or two hundred million Hong Kong dollars, or even more than a billion Hong Kong dollars.

But now, the real estate industry is in a downturn, properties are not selling, and the return of funds is nowhere in sight.

With Huafeng Bank and Standard Chartered Bank struggling to survive, they have tightened credit, making large loans that were once easily obtained extremely difficult to come by.

His vast assets seemed to be frozen instantly, turning into a heavy burden that could not be liquidated.

This is no longer a business competition; this is clearly an attempt to kill Li Jiacheng! To completely destroy all the hard work he has put in over the years!

But who can be blamed for this?
He had only himself to blame. He could have improved his relationship with Lin Haoran by relying on Bao Yugang's connections. Even if they weren't good business partners, at least they wouldn't have been targeted by Lin Haoran.

However, due to the issues with the agreement, he was simply unable to do so.

Originally, relying on Hutchison Whampoa and Cheung Kong Holdings, he felt that even if he was not as good as Lin Haoran, he was not afraid of him.

But he realized that he had overestimated himself.

It turns out that without the financial support of banks and the exorbitant profits of real estate, his business empire was so fragile that a price war targeting retail outlets could trigger a chain reaction and push him to the brink of disaster!

An emotion mixed with extreme regret, resentment, and a huge sense of frustration gnawed at his heart like a venomous snake.

He had never realized so clearly before that the gap between himself and that young rival might not only lie in funding and methods, but also in the foresight of industrial layout and the building of risk resistance capabilities.

Lin Haoran had already laid out upstream production and branding, and even ventured into the mainland to reduce costs, while he himself was still immersed in the quick money game of real estate and capital operation!
This profound realization stung him more than the numbers of the losses.

Everyone fell silent, their eyes fixed on Li Jiacheng, awaiting his decisive action to turn the tide.

Li Jiacheng slowly raised his head. His face no longer showed anger or resentment, only a numb weariness and a deep sense of powerlessness.

It was the desolation of a powerful figure's downfall.

The reason he insisted on a price war between ParknShop and Wellcome was that he didn't want ParknShop to expose the internal vulnerabilities of Hutchison Whampoa to others.

He also did not want outsiders to think that Li Ka-shing had just taken over Hutchison Whampoa and immediately suffered a crushing defeat under the attack of Hongkong Land Group, unable to even hold a core position!
This concerns his reputation, the market's confidence in his leadership, and even the share price of Cheung Kong Holdings! Once signs of failure emerge, it will trigger a chain reaction of trust crises with unimaginable consequences.

Therefore, he had to persevere, even knowing it was like drinking poison to quench his thirst, even though he was bleeding every day!

"Even if we can't hold on, we have to! The price war at ParknShop can't stop! At least not now!" Li Jiacheng's voice was hoarse, but it carried an undeniable determination.

These words stunned all the executives, their faces filled with confusion and anxiety.

“Mr. Li! This…” the financial director couldn’t help but speak up.

Li Jiacheng raised his hand to interrupt him: "I know we're losing money every day! I know we're short on cash! But have you thought about what the market will think if we admit defeat now and hand over ParknShop to others?"
What's Standard Chartered's perspective? I'll try to raise the money that's about to mature. Let's adjourn the meeting and I need to think about it.

(End of this chapter)