Chapter 479: Good News — Huge Profits Last Year; Bad News — Not Much Available for Use!
With a severe shortage of employees, Jardines Matheson Securities was already struggling to survive.
Adding to their woes, the aggressive assault from Galaxy Securities made the situation even worse.
Their controlled funds were continuously being squeezed out, and within just two days of Galaxy Securities' establishment, the once-glorious Jardines Matheson Securities was teetering on the edge of collapse.
And this was far from the end of their troubles.
As Galaxy Securities continued "draining blood," other major investment firms in Hong Kong also smelled the scent of blood and quickly joined the brutal competition.
Victory Hui Fung Company, Bao Yuan Investment Company, Sun Hung Kai Securities — all prestigious names in Hong Kong's financial sector — began applying immense pressure on Jardines Matheson Securities, eager to carve out pieces of its collapsing empire.
Victory Company, in particular, which had always been a strong rival capable of matching Jardines Matheson Securities, seized this rare opportunity to vie for industry leadership.
Leveraging its abundant capital and wide market influence, it launched fierce attacks: poaching clients from Jardines Matheson Securities, maliciously spreading damaging rumors, and relentlessly tarnishing the company's reputation.
Following Victory Company's lead, other firms joined the frenzy, and Jardines Matheson Securities found itself besieged on all sides.
In just a matter of days, almost all of Jardines Matheson Securities' business had been divided up among its rivals.
Naturally, the biggest winner was Galaxy Securities, which — thanks to the defection of former employees — absorbed a huge chunk of Jardines Matheson Securities' original client base and resources.
Victory Company also reaped immense benefits, its market value soaring dramatically and cementing its position as the new leader of Hong Kong's securities investment industry.
Bao Yuan Investment Company, Sun Hung Kai Securities, and others fattened up handsomely as well.
In less than a month, Hong Kong's securities investment landscape had undergone a dramatic upheaval.
On January 15th, Jardines Matheson convened another press conference.
At the event, Simon Keswick helplessly announced the formal bankruptcy of Jardines Matheson Securities.
An era had quietly come to an end.
Though Jardines Matheson still had money, Jardines Matheson Securities was merely a subsidiary, and they held only a 40% stake in it.
Naturally, they had no intention of bearing the burden of further losses from the failing company.
Thus, announcing bankruptcy at this point was the most suitable and strategic choice.
The bankruptcy announcement landed like a boulder in a calm lake, sending waves across Hong Kong.
Once, Jardines Matheson Securities had been a shining jewel in Hong Kong's financial world, a firm trusted by countless investors.
Now, it was reduced to a page in history.
Simon Keswick's resignation to fate during the press conference was a silent lament for a bygone era.
His eyes were full of sorrow and unwillingness, but reality was cruel and offered no chance for redemption.
News of the bankruptcy swept across Hong Kong, leaving the city's citizens in stunned silence.
People discussed the rise and fall of Jardines Matheson Securities with sighs of awe at the market's mercilessness and unpredictability.
Those investors who had weathered storms with the company felt as if knives were twisting in their hearts, unable to accept the brutal truth.
However, the market's law is ruthless: only the fittest survive.
The bankruptcy, though heartbreaking, opened new opportunities and challenges for Hong Kong's securities investment sector.
The surviving companies would have to emphasize risk control and business innovation more than ever.
Jardines Matheson Securities' collapse marked a turning point in the development of Hong Kong's financial industry.
And at the center of it all, Lin Haoran's name was frequently mentioned.
It was precisely because of the feud with Lin Haoran that Jardines Matheson had suffered such a brutal reprisal.
Not only had they been forced to pay five hundred million Hong Kong dollars in compensation to the government, but they also lost one of their most important subsidiaries — Jardines Matheson Securities, once valued at over 1.5 billion Hong Kong dollars.
Lin Haoran had now become a figure that no one dared to provoke in Hong Kong's business world.
When Lin Haoran received the news that Jardines Matheson had officially announced the bankruptcy of Jardines Matheson Securities, he was sitting in the President's office of Hong Kong Electric Group.
Even he was surprised that Jardines Matheson would simply abandon Jardines Matheson Securities so decisively.
When he first decided to poach Jardines Matheson Securities' talent, he had not expected that it would lead to outright bankruptcy.
He had thought, at most, that they would suffer heavy losses.
Still, whether Jardines Matheson Securities declared bankruptcy or not made little difference to him.
After all, he had already reaped the greatest benefits.
Whether it was the talent nurtured by Jardines Matheson Securities or the client business pulled over, the value he gained was immense — worth at least five to six billion, maybe even seven to eight billion Hong Kong dollars, or more.
And what had it cost him?
Only about thirty million Hong Kong dollars in penalties paid to the defecting employees and a salary increase for them.
Compared to the profits, these expenses were negligible.
Across from him, Chen Shoulin had just returned from the Finance Department.
"Boss, I just came from the Finance Department. The year-end financial report is ready.
Since Hong Kong and China Gas Company operates independently, their data hasn't been consolidated here.
This report purely reflects the financial status of Hong Kong Electric Group. Please take a look," Chen said, handing over the report.
Lin Haoran nodded and took the document, reading carefully.
At present, Hong Kong Electric Group not only managed all the businesses of the original Hong Kong Electric Company but was also the largest shareholder of China Gas Company.
Over the past two years, the company's business had expanded rapidly, and it had even broken into the Southeast Asian market.
Compared to two years ago when Lin Haoran had acquired it, Hong Kong Electric Group's strength had easily more than doubled.
For instance, its market value had ballooned to a staggering 6.2 billion Hong Kong dollars — nearly quadruple its value from two years ago.
Lin Haoran meticulously examined the financial figures.
The report consisted of current assets, fixed assets, intangible assets, and more.
Skipping past many numbers, he focused on the total assets and profits.
In the past year alone, the electric power business had generated profits of 421 million Hong Kong dollars;
Fung Chee Electronics, a subsidiary selling appliances, had earned 156 million Hong Kong dollars;
Real estate had generated an impressive 859 million Hong Kong dollars;
And other businesses like finance, public communications, and technical services had contributed 296 million Hong Kong dollars in profits.
These figures were all after costs had been deducted.
Thus, the total annual profit amounted to an astonishing 1.732 billion Hong Kong dollars.
Notably, real estate had overtaken electricity as the most profitable sector.
Previously, selling electricity had been Hong Kong Electric Group's primary source of profit.
The sudden surge in real estate profits was largely due to Lin Haoran's strategy: after acquiring Hong Kong Electric Group, he had directed it to hoard land.
Later, when Wanqing Group and Land Corporation sold off their real estate projects and land, Hong Kong Electric Group followed suit, cashing out at the right time.
That explained the massive windfall.
Given the profits, a market value of 6.2 billion Hong Kong dollars for the group was perfectly reasonable.
However, Lin Haoran knew well that real estate profits were largely a stroke of luck from last year's market conditions.
There would be no guarantee of a repeat this year.
He also noticed that overseas operations were still in the investment phase, with little expectation for immediate profits.
Moreover, despite the high profits, the company currently had only around 600 million Hong Kong dollars readily available.
Why?
Because high interest rates in Hong Kong made loans expensive, and most of Hong Kong Electric Group's cash flow had been allocated to Hui Ze Financial Company for management — over 1.1 billion Hong Kong dollars had been placed there.
"Boss, do you want to arrange for a dividend?" Chen Shoulin asked as Lin Haoran put down the report.
"If needed, after setting aside 100 million Hong Kong dollars as a reserve fund, we can mobilize about 500 million Hong Kong dollars for distribution," he added.
But 500 million Hong Kong dollars meant Lin Haoran, holding 49.9% of shares, would only get a little over 200 million — hardly exciting.
Lin Haoran shook his head.
"Forget it. We'll hold off on dividends for now. Notify me once Hui Ze Financial recovers more funds. Also, don't use those funds for loans anymore," he instructed.
Those measly loan interests — Lin Haoran didn't even care for them.
"Understood, Boss!" Chen nodded.
"Has China Gas Company's financial report come in yet?" Lin Haoran continued asking.
Though he didn't expect much, he still wanted to see how much profit the company had earned over the past year.
"It's ready. I'll have them fax it over right away," Chen said and made a quick call.
Soon, another financial report was placed before Lin Haoran.
It showed profits of 862 million Hong Kong dollars and available funds of 438 million Hong Kong dollars.
The rest had been reinvested.
The numbers were good — enough to place the company in the top ten most profitable firms in Hong Kong.
Even giants like Hui Fung Bank and Swire Group, despite their size, often struggled to achieve this level of profit.
Still, Lin Haoran sighed.
Even if he ordered a dividend payout, it wouldn't amount to much in his hands.
China Gas Company's ownership structure was complex.
When Lin Haoran had orchestrated its acquisition, he made Hong Kong Electric Group the largest shareholder with a 20% stake;
Wan An Real Estate held 12.3%;
Huanyu Investment Company owned 17.6%;
Meaning Lin Haoran's side controlled 49.9% in total.
Thus, even if they distributed all available funds, what Lin Haoran would actually receive was modest.
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