Chapter 126: The Value of Oil Has Doubled
Three days later, at a government land auction, Lin Haoran attended with Yang Mingyi.
This auction did not attract many real estate companies—only thirteen showed up.
Representing Wan'an Group, Lin Haoran ultimately won bids for two parcels of land.
The first was the government site in Kwai Chung, purchased for HK$18.6 million.
The second was the government site in Kowloon Tong, purchased for HK$10.9 million.
Originally, he had also wanted to acquire the industrial land in Chai Wan, but it was obvious that one real estate company was determined to get it, driving the bidding far beyond market value.
In the end, persuaded by Yang Mingyi, Lin Haoran stopped bidding.
Otherwise, he would have taken three out of the four parcels.
As for the seabed lot in Yau Ma Tei that required land reclamation, the auction terms required reclamation work to begin as soon as possible after purchase, so Lin Haoran never considered it.
Ironically, that parcel attracted the fiercest competition. Nearly ten real estate companies bid on it, making it clear that many had come specifically for that site.
After all, Yau Ma Tei is in central Kowloon. Compared with suburban land, it was far more valuable, especially being a waterfront property.
In the end, the land was won by a consortium formed by three companies.
After borrowing HK$130 million from HSBC, Lin Haoran told Yang Mingyi about his plan to stockpile land.
As a result, the general manager of Wan'an Group now fully understood the new boss's development philosophy.
To Lin Haoran's surprise, Yang Mingyi strongly supported the idea.
Buying land did not necessarily mean immediate development.
In Hong Kong, many real estate tycoons acquired large amounts of land and simply left it undeveloped. Several years—or even more than a decade—later, the land value had quietly multiplied several times over.
Of course, only financially powerful developers could afford such a strategy, such as Henderson Land, Cheung Kong Holdings, New World Development, Sun Hung Kai Properties, and other industry giants.
Once you bought a piece of land and chose not to develop it but instead hold onto it, the capital tied up in that land could not be recovered.
The rapid rise in Hong Kong property prices was closely related to many developers hoarding land instead of developing it.
After acquiring the two parcels, Lin Haoran did not stop there.
After all, they had cost less than HK$30 million in total.
He certainly wasn't going to leave the remaining hundred-plus million dollars sitting idle in a bank account.
Government auctions were not the only source of land. There were also many owners in the secondary market looking to sell.
So, with Yang Mingyi's assistance, Lin Haoran spent all of the borrowed funds within just one week.
Land purchased on the market was slightly more expensive than government auction prices, but not by much, and still acceptable.
As a result, Wan'an Group added more than a dozen parcels of land of various sizes to its holdings.
These properties were spread across Hong Kong, including North Point, Sheung Wan, Kwun Tong, Chai Wan, Kwai Chung, Kowloon Tong, Shek Kip Mei, Causeway Bay, and other areas, mainly in urban centers and suburban districts.
As for land in the New Territories, Tuen Mun, Yuen Long, and other areas far from the city center, although prices were cheap and there was plenty available, Lin Haoran had no interest for the time being.
His goal was to be able to sell these parcels quickly when the time came, and urban and near-suburban land was obviously much easier to sell.
In the blink of an eye, March arrived.
After more than a month of adjustment, Iran's new interim government finally resumed official oil exports.
However, the oil crisis did not end because of this.
Before the crisis, Iran had exported more than six million barrels of oil per day.
Now, after resuming exports, daily output was only a little over one million barrels.
This additional supply did nothing to improve the global balance between supply and demand.
Moreover, the top-tier capital interests controlling oil prices had no intention of letting prices fall.
As a result, international oil prices not only failed to stop rising after Iran resumed exports—they climbed even faster.
By mid-March, international crude oil prices had risen above US$24 per barrel.
Lin Haoran's purchase cost, however, had been only US$12.50 per barrel.
In other words, in just over four months, the value of his crude oil had nearly doubled.
Only a handful of people knew about this, including Pao Yue-kong and Michael Sandberg. Even his father, Lin Wan'an, had no idea.
But Lin Haoran was in no hurry to sell.
There was no need to enter the gold futures market so soon, so he decided to wait for oil prices to rise further.
At the very least, he wanted prices to increase by more than double before he would be satisfied.
As for waiting until prices exceeded US$30 per barrel? That would take at least until next year. Lin Haoran had no intention of wasting that much time on oil when moving the funds into the gold market would generate even greater profits.
It wasn't long before Lin Wan'an learned that Lin Haoran had borrowed money from the bank to accumulate land.
Surprisingly, he did not interfere much.
He knew that his own investment strategy in the past had been overly conservative.
Land was a high-quality asset. Even if prices fell, they would not fall by much.
Even if there were losses, they should be limited.
If his son lost money, it would serve as a lesson. If he made money, it would prove that his son had greater investment courage than he did.
For that reason, Lin Wan'an did not try to persuade him this time.
Since officially stepping down as chairman of Wan'an Group, Lin Wan'an had fully embraced retirement, living leisurely and sometimes not visiting the company even once in an entire week.
Clearly, he was satisfied with the group's steady development.
Lin Haoran even hired a private physician specifically to help improve his father's health.
Meanwhile, after more than two months of acquisitions, Wardley once again purchased over three million shares of Qingzhou Yingni.
Originally, there had been around thirteen million shares in the hands of public investors. More than eight million had been acquired initially, followed by another three million-plus, leaving only a little over one million shares outside Lin Haoran's control.
At this point, he effectively controlled more than 97% of the company, meaning privatization could essentially be declared a success.
However, from Lin Haoran's perspective, there was little practical difference between Qingzhou Yingni being privatized or not.
Therefore, he was in no hurry to redeem the company's shares from Wan'an Group.
Since Burton took over Qingzhou Yingni, he had continuously expanded into overseas markets, and the company's profits kept increasing.
In January, Qingzhou Yingni earned more than HK$3 million in profit.
By February, profits had reached an astonishing HK$4 million-plus, with overseas markets contributing half of that amount.
It could be said that Qingzhou Yingni's overseas expansion strategy had been extremely successful.
In just two months, the company's cement sales ranking in the Philippines had jumped from fifth to third.
With nearly a century of history, Qingzhou Yingni's product quality was clearly superior to other domestic Philippine cement brands.
As a result, the company's Manila branch attracted more and more customers.
At the same time, Burton was actively preparing to enter the Singaporean and Malaysian markets, full of enthusiasm for the company's expansion.
Naturally, Lin Haoran fully supported him.
Burton had nearly twenty years of corporate management experience and extensive connections throughout Southeast Asia. Under his leadership, Qingzhou Yingni's growth had clearly accelerated, moving from the slow lane into the fast lane.
Perhaps because he appreciated Lin Haoran's trust, Burton's loyalty also increased slightly, rising from 85 to 89.
In addition, over the past few months, Chinese managers had come to make up more than half of Qingzhou Yingni's middle and senior management. Foreign managers with insufficient ability were either dismissed or voluntarily accepted demotions.
Although this required paying substantial severance compensation, replacing mediocre, less loyal foreign managers with capable and loyal Chinese managers completely transformed the company.
Anyone with a loyalty rating below 70 was categorically barred from management positions.
Lin Haoran regularly held management meetings. Whenever he identified disloyal managers, he quietly noted them down and had Burton replace them directly.
Otherwise, no matter how capable they were, sooner or later they would exploit their positions to harm the company's interests.
Seeing that Qingzhou Yingni had accumulated more than HK$15 million in available funds, Lin Haoran did not let the money sit idle in the bank. He instructed Burton to use HK$13 million to purchase two parcels of land in Kwun Tong, leaving the remaining HK$2 million-plus as working capital.
March quickly passed, and April arrived.
International oil prices continued climbing, finally breaking through US$25 per barrel at the beginning of April.
Moreover, everyone noticed that the pace of the increase was accelerating.
At this point, the value of Lin Haoran's crude oil holdings had officially doubled.
If he found a buyer now, he could immediately receive US$120 million.
And it would be extremely easy to sell.
According to news reports, demand from petrochemical refining companies far exceeded supply. In oil-producing countries, buyers even had to queue to purchase sufficient crude oil.
The waiting time could easily stretch from half a month to a full month. By then, oil prices might have risen another one or two dollars per barrel, pushing costs even higher.
During this period, the exchange rate between the U.S. dollar and the Hong Kong dollar had also risen somewhat, from HK$5 per US$1 to around HK$5.3 per US$1.
In other words, the batch of oil he had purchased was now worth HK$636 million.
Back in February, Pao Yue-kong had called Lin Haoran twice to ask whether he intended to sell the crude oil. If he was interested, petrochemical companies were willing to buy it at prices slightly above the international market rate.
As the owner of the world's largest ocean shipping fleet, Pao Yue-kong naturally had close ties with petrochemical companies, so it was only normal that they approached him.
Many hoped to obtain crude oil through his connections, which was why he thought of Lin Haoran.
However, Lin Haoran still refused to sell.
Because the time was still not right.
In March, Pao Yue-kong called again with the same purpose.
This time, however, Lin Haoran told him directly that he would decide whether to sell the crude oil in early June. If any companies still needed it then, they could negotiate with him.
After that, Pao Yue-kong did not press the matter any further.
(End of Chapter)
✨ Love this novel?
Visit my Patreon for fast access and advanced chapters! patreon.com/BbingTranslations Thank you for your support.❤️
Comments
Post a Comment