Tao Liangchen
Chapter 763 The Advantage Is Mine
Sihai International Group has acquired quite a few plots of land over the past three or four years. However, there has been a lot of thunder but no rain, with even the foundation leveling taking a year or two. This way of doing business is truly uninspiring.
Once the loans are secured, the construction of the integrated plaza in the Guomao area of the Si Jiu Cheng (Four Nine City, i.e. Beijing), as well as the cultural and tourism cities in Hu Shi (Shanghai), Pengcheng (Shenzhen), and Guangzhou, can all commence.
Shopping malls and office buildings, although kept as rental properties rather than for sale, have a somewhat lengthy payback period.
However, the value of land and real estate is significantly different. After they are built, they can continue to be used to refinance old debts with new loans, further expanding the scale of Sihai International Group.
Su Yehao and his father had a brief discussion.
At the dinner table, everyone, including Boss Xu, didn't even dare to breathe loudly.
Hearing about investment amounts of hundreds of billions of RMB, they were all incredibly envious, as if witnessing a new world at another level.
Compared to this, the scale of Hengda Real Estate Company was pitifully small.
Suddenly, Boss Xu had an epiphany.
He realized that if he wanted to become a wealthy businessman like this father and son, influencing the world and giving directions, he couldn't start by being subordinate to others.
Otherwise, even if the company grew and prospered in the future, people would only say it was due to the Su family's efforts, and he, the founder, would seem like he was working for someone else.
Being a wealthy man with assets of hundreds of millions in the mainland, he inevitably had some pride. Furthermore, Hengda Real Estate currently only lacked funds for expansion and had not yet reached a critical moment of life or death.
In fact, after careful consideration, Boss Xu would most likely still choose to retain control of the company. At this moment, he simply had some insights that accelerated the process of entanglement.
At his level of wealth, he no longer worried about food and drink.
Unless he wanted to cash out and leave, or lacked ambition in his career, there was indeed no need to easily give up control of the company.
Therefore, after Su Yehao and his father finished talking, Boss Xu raised his glass and said with a smile:
"After thinking it over, I still think we should stick to the previous plan, which is for Su to invest 200 million RMB to be used as development funds for our company. When the equity changes, we will give you one-third of Hengda's shares. If there are no problems, we can sign the contract directly in the next few days."
Worried that his father would cause trouble, Su Yehao quickly agreed:
"Alright, based on Hengda's current situation, a valuation of 400 million RMB is quite reasonable. One-third is difficult to calculate, let's make it 35%. I'll help you plan it out later, and you definitely won't lose out."
The difference between the two was only a little over one percent of the equity, which was not worth mentioning.
Boss Xu replied with a smile:
"No problem, Little Su is a well-known Asian stock god. I couldn't ask for more than to have you help us develop the company's strategic development plan. There's also something else. I heard that after Little Su invested in Country Garden, you also provided some low-interest loans? I don't know if it's convenient, but could you also say a word to the bank for us? From now on, we'll be partners, and it'll be beneficial for all of us if Hengda Real Estate develops faster."
The abacus beads were hitting Su Yehao's face.
Giving up the investment funds, but choosing to borrow from the bank instead, clearly showed that he wanted both the money and to retain more control.
But then again, if Hengda Real Estate Company could maintain a sufficient cash flow at this crucial moment, it would undoubtedly be very beneficial for the company's future development, which would indirectly increase the value of the Su family's 35% stake.
After pondering for a few seconds, Su Yehao gave his reply, nodding and saying:
"No problem, but I'll say the ugly things first. We will send a team from time to time to be responsible for supervising key aspects such as finances and construction quality, to ensure that this investment project does not have any risks. Is that okay?"
"Of course, as a shareholder, it's only natural to send people to understand the company's situation. I will definitely cooperate fully..."
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After dinner.
Su Yehao and his father went upstairs to shower and get massages.
During this time, Old Su complained: "You're too impulsive and not cautious enough. You actually only asked for 35% of the shares just now. It should have been no problem to ask for two or three more points."
Su Yehao, wearing a disposable bathrobe, lay on the massage bed and replied:
"You know about Hengda Real Estate's asset-to-liability ratio. With Boss Xu's style, there will probably be many more places where they need money in the future. It's better to make it seem like we're easy to talk to, so that next time they're preparing to raise funds, they'll think of our family first. At the same time, it can have the effect of buying bones with a thousand gold, why lose big for small with that bit of petty profit?"
"That's right, there are still several real estate developers waiting for me to discuss financing with."
Comfortably sighing, Old Su continued: "I'm worried that if we support them, they'll all be like wild horses that have been let loose, and the apprentice will starve the master. If they raise new funds again and dilute our family's equity, what should we do? Should we add a clause for pre-emptive financing rights?"
"I don't feel like there's any need. Even if they become giants with a market value of hundreds of billions of RMB, so what? The advantage is on our side."
Su Yehao gestured for the young lady to step lighter and continued to explain:
"The dividend of real estate development is estimated to be only ten or twenty years. The later the financing, the less worthwhile it will be."
"Even if the equity is diluted, the value won't change much. It will also make it easier for our family to cash out at any time and take the money to invest in other industries. If there are hundreds of Sihai International Shopping Plazas, hundreds of five-star hotels, and hundreds of office buildings and residences across the country, and we keep them in our hands to collect rent, that feeling would be simply wonderful."
"That's my ultimate goal in investing in the real estate industry, to collect rent and use part of the profits to invest in high-tech industries. The barrier to entry for residential development is too low, and the dividend period will eventually pass, just like those real estate companies in developed regions, which can only earn hard-earned money..."
The scene outlined by Su Yehao was so beautiful.
His father almost laughed out loud, waving his hand and saying:
"Keep dreaming your daydreams, hundreds of shopping plazas, I'd wake up laughing if there were dozens of them. Reaching too high is a big taboo, don't think that just because you're successful now, I can't teach you a lesson."
The young lady helping Su Yehao with his back massage also felt like she was living the high life.
This young lady was in her early twenties, with a pleasing appearance, fair and clean, and had started working early to earn money because she wasn't good at studying.
She probably never dreamed that one day she would be able to step on the richest man in Hong Kong, directly reaching the peak of her life.
On weekdays, the thing they fear most in their line of work is customers who have drunk too much and have ulterior motives.
However, today, these two wished that Su Yehao would do something inappropriate after drinking, anyway, they clearly wouldn't be at a disadvantage.
Last December, the matter of Nong Qingying was transmitted to the mainland and was heavily sensationalized by the media.
As a result, many people now believe that because Nong Qingying gave birth to a son, she directly received assets of 1 billion Hong Kong dollars from Su Yehao afterward, becoming a winner in life.
...