Siheyuan: My wife is Xu Huizhen

Chapter 656

After careful consideration, she found that according to the operating conditions described by He Yuzhu, this level of profit could indeed be achieved.

After all, after years of struggling in the real business world, she knows very well that market demand is not an endless treasure that is bottomless and inexhaustible. It is not possible to easily take all the business into the arms like a greedy fisherman by simply increasing production capacity without limit. This idea simply does not work in actual business operations.

Normally, the free trade advocated by the capitalist world seems to be as beautiful as a dream bubble. However, if you peel off the bright and beautiful appearance and explore its essence, it is nothing more than a deceptive means to confuse the public and deceive the world.

Take the currently popular clothing business as an example. Out of consideration for their own interests, European and American countries have set up many obstacles to the export of Hong Kong products, such as raising tariffs, setting quotas, and various restrictive measures have emerged one after another, using every possible means.

Although the electronic products that He Yuzhu currently specializes in have not yet been subject to such restrictions, he has been in the business world for many years and has a deep insight into market rules. He knows very well that he must not expand blindly without restraint, otherwise he will inevitably fall into an abyss from which there is no return.

He Yuzhu's eyes were deep and serious, and he frowned slightly as he spoke slowly, "This is the last batch of equipment. Now that the factory has reached this scale, the production capacity of electronic products has reached its limit."

Currently, these eight industrial buildings, with their complete production lines and skilled teams of workers, can theoretically produce tens of millions of radios every year.

However, from the perspective of market share, although there is a certain demand for radios in the current market, the saturation level is gradually increasing and the growth of new demand is slow; from the perspective of capacity digestion, the expansion of sales channels faces bottlenecks, and it is difficult to significantly increase sales in the short term to digest more capacity; from the perspective of the industry's competitive landscape, many competitors have made efforts, and the market competition is fierce, further squeezing the room for expansion.

Taking into account various factors, it is no longer realistic to continue expanding the production line.

Of course, the actual situation is that the number of products produced has not reached the theoretical tens of millions.

During the production process, due to factors such as cost control and diversified market demands, a considerable number of parts are selected and wholesaled.

Once these components enter the market, they are used to produce a variety of other electrical appliances, from simple small fans to complex household refrigerators, and they play an indispensable role in the broader home appliance market.

It is worth mentioning that all the equipment required for these 6 industrial buildings were carefully crafted by He Yuzhu himself in the space with his unique abilities.

During the production process, he studied the equipment drawings day and night, repeatedly polishing the precision of each part, which embodies his countless efforts and extraordinary wisdom.

He Yuzhu's eyes were as sharp as torches, and he looked into the distance with a determined look. There seemed to be a raging fire burning in his eyes, as if he had seen through the heavy fog and clearly saw the company's towering and magnificent blueprint for the future.

He took a deep breath, his chest puffing out slightly. His tone was filled with confidence and pride as he spoke with a resounding voice, "This year, we must proceed steadily and cautiously. Besides investing in the construction of the two restaurants, every penny we earn must be used to purchase government land and then embark on a large-scale construction of new industrial buildings."

At that time, the clock had just quietly crossed the threshold of 1962. In the eyes of those around, the road ahead seemed shrouded in thick fog. The future was full of unknowns and variables, and unpredictable risks were lurking everywhere.

But He Yuzhu is completely different. He possesses huge advantages far beyond the imagination of ordinary people.

Because he actually came from the distant future, and his mind seemed to be engraved with a detailed history of the development of the times, and he had a deep and detailed memory of the changes in the next few years.

He remembered it as clearly as if he had seen it with his own eyes, and he remembered that in 1965 and 1966, the industries in Hong Kong were about to usher in an unprecedented peak of vigorous development.

At that time, all walks of life sprang up like mushrooms after a rain, factory machines roared constantly, commercial streets were crowded and bustling, import and export trade was frequent, and the whole city presented a scene of vitality and extreme prosperity.

However, He Yuzhu also knew that this prosperous scene was just a brief calm before the storm.

What will follow will be a severe financial crisis that will be as powerful and overwhelming as a tsunami, enough to sweep across the entire Hong Kong.

In this storm, even Hang Seng Bank, which has a long-standing reputation in the financial world and has a foundation as deep as a towering giant, finds it difficult to survive the storm on its own.

In the end, they could only watch helplessly and unwillingly as the bank changed hands, being swept away by the tide of the times and heading towards a new situation helplessly.

Because of this, He Yuzhu, with his keen insight from the future, accurately perceived that the present was a once-in-a-lifetime, fleeting opportunity.

If they had acted decisively, purchased land to build industrial buildings, and then cleverly planned the layout, they could have sold these carefully built industrial buildings decisively in 1965 or 1966 when the market conditions reached a high point.

Such interlocking operations can not only help one avoid the stormy waves and huge losses that will be brought about by the financial crisis like accurately steering the ship in turbulent waves, but also make extremely rich profits by accurately judging the market trends.

If one thinks about it carefully, this is undoubtedly a well-thought-out, calculated and extremely cost-effective deal. If it succeeds, it will be enough to change the company's and even his personal business landscape in Hong Kong.

Liao Lieying, standing nearby, was caught off guard by He Yuzhu's plan, and a flicker of unconcealed surprise flashed across her eyes. She couldn't help but ask, "Our company already owns 28 industrial buildings. Our scale is already quite impressive, and we're quite well-known in the industry. Why are you still building more? This plan sounds a bit too radical."

She frowned slightly, confused by He Yuzhu's seemingly bold and risky plan.

He Yuzhu's lips curled up slightly, revealing a gentle smile. He nodded gently and then patiently explained, "Have you noticed that this year's business has improved significantly compared to last year?"

In fact, since 1959, Hong Kong's business environment has been like a gentle spring breeze, gradually recovering from its previous downturn.

In 1959, the total value of imports and exports was only 81 billion yuan. Given the economic environment at the time, this figure was not bleak, but it was not optimistic either.

However, just two years later, in 1961, this figure soared like a rocket to 99 billion yuan. Such rapid growth momentum was demonstrated in just two years.

This clear and significant change in data undoubtedly strongly indicates that Hong Kong's economy is developing rapidly with a vigorous and upward attitude, and market demand is also increasing day by day and becoming more and more vigorous.

Moreover, He Yuzhu judged with his keen business insight that this upward trend would not come to an abrupt end in the short term, but would continue for several years, until after 1967, when it would suffer setbacks due to the impact of the financial crisis.

During this period, the rising trend of land prices was particularly eye-catching. Take the old buildings in Central as an example. Their selling price soared from 400 square feet to 1000 square feet like a helicopter. Even though the price increase was so large and staggering, the market still showed a prosperous scene of brisk buying and selling. Buyers flocked to the market as if they had discovered a treasure, and sellers were grinning from ear to ear, making a lot of money.

Liao Lieying frowned slightly, a hint of worry in her eyes, and solemnly reminded: "Don't forget, the company still has a loan of 1500 million that has not been repaid!"

This huge amount of debt is like a heavy mountain, always weighing on the company's financial statements, like a sword of Damocles hanging over its head.

However, upon hearing this, He Yuzhu appeared extremely calm and composed. He raised the corners of his mouth slightly, revealing a confident smile, and replied easily, "Don't worry, we'll borrow it for another year. It won't be too late to repay it in 1963."

It turns out that the annual interest rate of the 1500 million loan is only one point. After careful calculation, the interest to be paid each year is only 150 million.

With the booming profitability of He Yuzhu's company today, the mere 150 million in interest expenses is nothing in his eyes.

The company's daily operations are like an efficiently operating money printing machine. It only takes half a month to easily earn back the interest from the continuous revenue.

Therefore, given the current business conditions, interest pressure is just a piece of cake for him and there is nothing to be afraid of.

However, if you need to repay the loan in excess of 1500 million, the situation will be very different.

The funding arrangements carefully planned by He Yuzhu for this year are likely to be stretched. Many established plans, such as expanding production lines, exploring new markets, and developing new products, will be difficult to implement due to lack of funds.

It is no exaggeration to say that nothing major can be accomplished this year, and the company's development will be forced to stagnate.

Not only that, He Yuzhu also came up with a bold and challenging idea in his mind - to use the existing industrial building as collateral for mortgage loans.

He knows very well that although the current real estate market seems prosperous, the competition is also becoming increasingly fierce. If he wants to open up a broader world in this red ocean, he has to find another way.

Investing the funds obtained from the mortgage in the real estate business will further expand the company's presence in the real estate sector, either by developing new commercial complexes or building high-end residential areas, creating more profit growth points for the company.

Of course, such a decision is like dancing on the edge of a cliff, with risks and opportunities coexisting.

On the one hand, mortgage loans mean that the company will bear heavy debt pressure. Once there is a problem with the recovery of funds, the risk of a broken capital chain will hang over its head like a sword of Damocles.

On the other hand, the real estate market is unpredictable, and factors such as policy regulation and economic fluctuations may have a huge impact on the market.

Therefore, this requires careful consideration and detailed planning and calculation.

The finance team must accurately calculate the mortgage costs and the impact of interest rate changes on repayments. The market research team must conduct in-depth analysis of future real estate market trends and the development potential of different regions. The legal team must ensure that the entire mortgage loan process is compliant and legal.

Only after comprehensively weighing the pros and cons can you make a careful decision.

After all, the company now owns as many as 28 industrial buildings, which is not a small number.

These industrial buildings are distributed in various industrial parks in the city, occupying a large amount of land resources and capital costs.

When a company's asset size reaches a certain level, the market's capacity and acceptance become issues that must be considered.

If we continue to build another ten or twenty buildings on a large scale, will there be a situation where the products are unsold when the market is down or the competition is fierce?

When the market is down, companies' willingness to expand decreases, and the demand for leasing and purchasing industrial buildings drops sharply; when competition is fierce, the low-price strategies and high-quality services of peers may make their newly built buildings lose competitiveness in the market.

This is indeed a difficult problem that is vexing and needs in-depth study, as it concerns the future success or failure of the company.

"Okay, you decide on this matter."

Liao Lieying sat on the large leather chair, tapping the table lightly with her fingers, frowning slightly. After thinking for a long time, she spoke slowly with a hint of helplessness.

She has experienced countless ups and downs in the business field and has been struggling for many years. She has always been sensitive to the slightest trend in the market.

Recently, she has naturally noticed that the economic situation is quietly changing and showing signs of improvement.

At this moment, facing the choice of the company's development direction, she weighed it intensely in her heart and realized that her concerns might be a bit conservative.

When I think about He Yuzhu's past business layout, he was always able to accurately capture business opportunities and demonstrate vision and courage far beyond ordinary people. Those successful cases are still vivid in my mind.

So, she no longer insisted on her own opinion and chose to trust He Yuzhu's judgment and decision.

The next day, He Yuzhu came to the company early and devoted himself to sorting out the company's affairs.

He was wearing a neatly tailored shirt and sitting calmly in front of a large desk. In front of him were piles of various data reports and documents like a mountain.

He wore reading glasses and looked carefully at each page with focused eyes. The rustling sound of the papers turning was particularly clear in the quiet office. He did not miss any subtle details that might affect the company's decision.

He conducted an in-depth analysis of the company's key data such as revenue, costs, inventory, sales channels, etc., and occasionally wrote comments on the margins of the reports with a pencil in his hand.