Chapter 1030 Zhejiang Farmers
The Red Rock Magic City Headquarters at No. 9 on the Bund.
In the video conference room, there are several 21-inch LCD screens hanging high.
Lu Jue, CEO of Taihua Group, Sha Zhigang, senior vice president of Taihua Group, in charge of Fuhua Residential Real Estate; Xia Changsheng, COO of Hongyan, Zheng Yunfei of Strategic Consulting Department, Hu Hu of Global Investment Research Department of Hanhua Group Wentai.
Basically they are all senior executives of the Xu family and a member of Xu Liang’s consulting team.
"The information has been sent to you, what do you think?"
"Mr. Xu, I do not recommend taking over the 'Olympic Sports Expo City' project in Hangzhou. There are three main reasons.
First. , China’s current market environment does not have the foundation to operate large-scale sports facilities.”
Large-scale stadiums require a developed sports industry to support it, not to mention that China does not have it now, even before Xu Liang was reborn.
Even worse.
Not even sea cucumbers or abalone can save those cowards from the Chinese football team.
“Second, Taihua Group does not have the experience and ability to operate large sports venues.
Third, the investment is too large.
At present, Taihua’s net debt has exceeded 30 billion US dollars, and the debt ratio exceeds 60%, so we are not suitable to invest in projects that will not be profitable for a long time.”
Taihua’s current operating model is very simple.
In the name of the company, a corporate bond is issued under the guarantee of Hongyan.
Hongyan's credit rating is 3A. Only if it provides guarantees can it ensure that Taihua's bonds are not junk bonds.
Only in order to obtain financing from the capital market at lower interest rates.
These bonds are sold throughout Asia and some European markets through the platform of Hanhua Securities.
After raising the money, Taihua used the money to acquire land in China.
After obtaining the land, let the cooperative construction company advance funds for development.
Taihua used this land to obtain loans from Standard Chartered Bank, Bank of China, Hua Xia Bank and other banks in which Hongyan and Hanhua had shares.
With a solid mortgage like land, the interest rate given by the bank will not be too high, and the mortgage rate can also reach 70%.
Taihua gets the money and then gets the land.
Repeat the above process.
As for the construction company's money, it is basically paid with the revenue of Taihua Commercial Real Estate. If it is not enough, it is paid with loans.
If the loan is not enough to continue acquiring land, then issue another corporate bond.
This is the operating logic of Taihua Commercial Real Estate.
If it were Fuhua, it would be different.
After letting the cooperative construction company advance the funds to complete the pile foundation project, they can directly sell the off-the-plan apartments and easily earn back the money.
As for Taihua's other businesses, you can make money and spend it yourself, and just take on reasonable debt.
So, Lu Jue has no interest in the ‘Olympic Sports Expo City’.
The inability to collect payment in time after completion means that Taihua's cash flow has declined. If it wants to maintain expansion, it can only continue to borrow debt, which will undoubtedly increase Taihua's debt burden.
Xu Liang could not deny it.
“Lao Lu has finished speaking, what about you?”
"Mr. Xu, do you plan to invest in the 'Olympic Sports Expo City' project yourself, or leave it to Taihua?" Zheng Yunfei asked.
As the director of Hongyan’s strategic investment department, he is very aware that during this period, Xu Liang has been increasing Hongyan’s liabilities to restore Hongyan’s financial structure to balance.
"Is there any difference?"
"If you plan to invest in 'Hongyan' as the main body, then I agree.
Hangcheng obviously also knows that, Sports projects do not make money, so we have given you some slack to expand the project land of the 'Olympic Sports Expo City'
With the current development speed and trend of Hangzhou, real estate is definitely profitable.
As for sports real estate, although it is not profitable now, it may not be so in twenty or thirty years.
After economic development, sports culture will also develop accordingly. This is a proven rule in the West, Japan and South Korea. "
Zheng Yunfei's idea was very good, but the facts 20 years later have proved that the laws of the West, Japan and South Korea do not apply in China.
"If Thailand is the main investment, then I object.
This will reduce Taihua's cash flow and slow down its development. "
Xu Liang did not express an opinion.
"Who has any opinion? "
"Mr. Xu, why are we so obsessed with the 'Olympic Sports Expo City'?
There is a large area of land around it that needs to be developed. Wouldn’t it be enough to just use a two-hundred-hectare piece of land to develop residential and commercial real estate? "Sha Zhigang said directly.
"It's a good idea, but what can be done with money? Is it worth using a BOE seventh-generation line with an investment of up to 30 billion Huaxia coins in exchange?" Xu Liang said.
The difference between developing a large piece of land and developing ten pieces of land is that the latter requires more time and administrative costs.
Not worth paying a big price.
Only projects such as Shuanghui and XCMG that cannot be obtained under ordinary conditions are worthy of being exchanged for BOE's production lines.
Hu Wentai said, who had never spoken. "Mr. Xu, if you are confused about the 'Olympic Sports Expo City' project, you may consider Zhejiang Agricultural Materials Group."
“Zhejiang Agricultural Materials Group?”
“Zhejiang Agricultural Materials Group is a supply and marketing cooperative of Zhejiang Province established in 1952 and changed to a joint-stock cooperative system in 1999.
It currently owns the pesticide manufacturer 'Jinniu Co., Ltd.';
The petrochemical subsidiary 'Tomorrow Holding Group';
There are 14 holding subsidiaries including the automobile retail company ‘Jinchang Automobile’; the agricultural materials distribution company ‘Huiduoli’; and the plastic industry and trade company ‘Xinguang Plastics’.
The main business covers agricultural supplies and automobiles, as well as integrated urban and rural trade circulation and comprehensive services for medicine.
In the two quarters of 2006, sales exceeded 8 billion Chinese dollars and net profit was 372 million Chinese dollars.
It is one of the top 100 enterprises in Zhejiang Province.
Its 'Hui Duoli' agricultural supplies chain store is the fourth largest agricultural supplies chain company in China, second only to China Agricultural Materials, Denong and Sinochem, with branches in Zhejiang, Jiangsu, Anhui, Jiangxi and Fujian. There are more than 2,300 agricultural supplies distribution stores in the five provinces.
It is the largest agricultural supplies retailer in Zhejiang Province.
Sales in the two quarters of 2006 exceeded 4.5 billion Chinese dollars, main business profits were 574 million Chinese dollars, and total profits were 142 million Chinese dollars.
If it can be integrated with Denong, the latter's agricultural supply chain stores will exceed 5,000 without large-scale mergers and acquisitions, and including named stores, the number will exceed 8,000.
It surpassed China Agricultural Materials and became the largest agricultural materials retail enterprise in the country.
Although Jinniu is far inferior to Red Sun, it is also one of the largest pesticide companies in Zhejiang Province. It owns 15,000 tons of pesticides including pyrethroids, 1,200 tons of imidacloprid, and 7,000 tons of chlorpyrifos. The fungicides are delicious Amine production capacity of 1,800 tons.
In the two quarters of 2006, sales exceeded 1.77 billion Chinese dollars, main business profits exceeded 447 million Chinese dollars, and total profits were 210 million Chinese dollars.
Although Jinniu's research and development strength in the field of pesticides is not as good as that of Red Sun, it is also a mainstream pesticide company in China that develops 'pyridine'.
If Jinniu can be acquired and Denong’s pesticide resources are integrated, the largest domestic pesticide giant with annual revenue exceeding 10 billion Chinese dollars will soon be formed. ”
Hearing this, Xu Liangliang was moved.
The profits of agricultural supply chain stores are actually very low, lower than supermarkets, with an average of about 10%.
But the profit from pesticides is much higher, almost 20 to 30%.
If Denong’s pesticide sales exceed 10 billion, the main business profit will at least exceed 2 billion Chinese dollars.
Coupled with the fact that the revenue also exceeds 10 billion, the profit is not low.
Denong has really grown up.
Thinking of this, Xu Liangliang made a decision in his mind.
"Who has any other opinions?"
Everyone was not a fool. They could all see that the big boss was already moved, so they didn't waste any more words.
“Since we have no objection, we’ll stop here first.”
After saying ‘goodbye’, everyone logged off.
"Sister Li, write down what Lao Hu just thought and send it to Liu Qiangxi, and ask him to negotiate with Zhejiang Province. After the negotiation, BOE's last seventh-generation line will be left in Hangzhou."
Li Jinling nodded.
"Mr. Xu, Guangling sent us an invitation letter and specifically stated that it is willing to exchange Asia Star buses for BOE's seventh-generation line."
"Yasing buses? Guangling has taken it back. "?"
Yaxing Bus is a mainstream bus manufacturer in China. Around 2000, Yaxing has been the domestic bus sales leader for seven consecutive years. The long-distance buses on the market are Yaxing and Huanghai.
When the company makes money, more monsters and monsters surround it.
Among them, a relative of a big boss opened an auto parts factory, took orders from Yaxing, and then subcontracted them to other domestic parts manufacturers.
One main theme: I do not produce parts, I am just a transporter of parts.
Make a lot of money without doing anything.
So happy.
But the company's production costs have increased. In order to make money, the price of the vehicle must also rise.
In the past, when there were not many passenger car manufacturers, that was all. There were not many choices, so you had to sell even if you didn’t want to buy.
But my lord, times have changed.
Not to mention the foreign manufacturers that are swarming into the country, domestic competitors such as Zhongtong, Yutong, and King Long have also emerged.
As expected, Yaxing’s sales plummeted.
In 2003, it suffered a huge loss of 148 million yuan, and sales dropped from nearly 10,000 vehicles at its peak to more than 4,600 vehicles.
As soon as Guangling saw that the company was about to lose its reputation, they naturally decided not to do it.
In order to change this situation, restructuring has become the only option.
Gu Chujun’s Green Cole came into Guangling’s sight, and the two sides hit it off immediately.
At the end of 2003, Lao Gu acquired 60.67% of Asia Star Bus shares at a high price of 400 million yuan and became the controlling shareholder.
In the past year, the famous ‘Lang-Gu dispute’ broke out in the history of Chinese business.
Lang is Lang Xianping's son, Gu is the former Chinese white goods giant "Kelong Electric", and the big boss of the down-and-out wealthy "Meiling Refrigerator".
Including Yaxing Bus and Xiangyang Bearing, they together form the famous Greencool series in the Chinese business community.
Lao Gu, like Tang Wanxin of Delong, was also an entrepreneurial young man with ideals in the beginning.
(End of this chapter)