Chapter 553: A Plan to Get Something for Nothing

"What's wrong? I see your expression is quite complicated?" Fan Heng asked his son Fan Wubing.

Fan Wubing shook his head and replied with mixed feelings, "How should I put it, my mood is more complicated now. Baosteel's price has increased."

"Baosteel often raises prices, so what does it matter?" Fan Heng said a little confused.

In Fan Heng's impression, a price increase in the steel market means the recovery of infrastructure. In other words, the impact of the Southeast Asian financial crisis is moving away from China. This should be considered a good thing, right?

"It's a mixed blessing!" Fan Wubing explained to Fan Heng, "If Baosteel's price increase this time is in line with the market trend, it's okay if there is a need for a price increase. However, according to my intelligence, Japan's Mitsui Zaibatsu is gradually Controlling this one of the country’s leading steel companies cannot but cause concern.”

In fact, the price increase of steel raw materials will inevitably lead to a collective price increase in the upstream industry, and some low-end raw material suppliers, such as iron ore supply and coke supply, will act randomly and swarm Get involved in this price hike.

At a time when the domestic market has been effectively regulated, Baosteel's sudden move is obviously untimely, but for Jiangnan Province, it is not bad news, or rather good news.

After Jiangnan Province introduced a huge amount of capital from Indonesian Chinese investment in steel companies, the steel and metallurgical industry developed very rapidly. The financial problem that restricted the overall development of this industry was suddenly completely solved, and what followed was Explosive growth.

In the past five months alone, the output of steel companies in Jiangnan Province has doubled, which has led to the rapid development of various downstream processing industries. It has also made Jiangnan Province's fiscal revenue begin to increase significantly. More importantly, It provides a strong guarantee for the foundation of the family car manufacturing industry that is about to begin in Jiangnan Province.

The price increase of Baosteel, which is the benchmark for the domestic steel market, directly led to a collective increase in sales in the steel industry. In other words, key enterprises in Jiangnan Province suddenly got a free ride on the rapid development and enjoyed huge profits from the beginning. profit.

Naturally, as the steel market strengthens, the iron ore market will also rise. However, due to Fan Wubing's investment in iron ore mines in Australia, Rio Tinto and BHP Billiton did not immediately increase the international iron ore market. Export prices, but chose a more cautious wait-and-see attitude.

Jiangnan Province had previously followed Fan Wubing's suggestion and signed a 50 million-ton iron ore supply contract with Rio Tinto and BHP Billiton, which could guarantee that demand within one and a half to two years would not be affected by price increases. In this case, the rewards obtained are extremely generous.

So when Fan Heng heard that Baosteel had raised prices, he

Not only are there no worries, but I feel a little relaxed. The reason is the rise in steel prices, which is like a shot in the arm for the developing steel industry in Jiangnan Province.

But the disadvantages are also obvious. The rapid rise in steel prices will inevitably lead to an increase in the cost of various infrastructure projects, causing prices to enter a new round of rising. This is very detrimental to the overall situation. This big order will cost all Chinese people. Go and pay.

Fan Heng thought for a while and realized that Fan Wubing was worried, but he also said to his son, "There are many factors that lead to rising prices. The rise in the steel market is just one of them. There is nothing we can do about it. Fortunately, Jiangnan Province has A certain amount of reserves will prevent you from being in a hurry.”

What Fan Wubing was thinking about was something else.

At present, the domestic steel market is booming and prices are rising, so my layout in Australia can be launched on a large scale at this time. After all, Fan's Iron Ore Investment Company, which has been prepared for a long time, is about to make its debut.

Baosteel's price increase was indeed a trigger. The next day, Rio Tinto and BHP Billiton announced that the price of iron ore would rise by 40%, from the original price of 18 US dollars per ton to the current price of 25 US dollars per ton. .

If Fan Wubing had not asked Jiangnan Province to sign a large order in advance, for 50 million tons of iron ore, based on the original price of 18 US dollars per ton, which has now risen to 24 US dollars, an additional payment of 350 million would have been required. Ten thousand US dollars, equivalent to almost three billion yuan in RMB.

Although more than three billion yuan is not enough in the face of big capital, in 1998, it was enough to save more than a dozen large enterprises in Jiangnan Province. This was still a lot of money. This way, Fan Heng had a lot of money.

The situation here in Western Australia is still calm, and Fanshi Iron Ore Investment Company is mobilizing a large number of workers to build ports leading to the outer sea, as well as railway transportation lines connecting ports and mining areas.

The railway line, which costs up to 2 million Australian dollars per kilometer, is a key construction project of Fanshi Investment Group. Currently, only about one-third has been built. The direct investment of 300 kilometers of railway has reached 600 million Australian dollars. In addition, A total of two billion Australian dollars will be invested in other investments. This amount of money seems quite scary, especially for an iron ore producer. To earn back this money, it means that it needs to sell More than 200 million tons of iron ore were produced.

However, Fan Wubing also considered the factor of rising prices, so he hoped to solve this problem through the capital market. In this case, the money raised through the capital market could soon be used to build factories, railway lines, ports, etc., but If prices rise too fast, your repayment pressure will be relieved.

However, if you want to do this, you also need to give investors confidence that your company can indeed ensure that profitability and production capabilities are equally excellent. This confidence is relatively difficult to establish.

"But now this opportunity has come." Fan Wubing smiled and said to Fan Heng, "Our Fan Iron Ore Investment Company in Western Australia will sign a supply contract of 20 million tons with Jiangnan Province. The price is calculated based on 70% of the current price of iron ore.”

Fan Heng was stunned for a moment, not knowing what Fan Wubing meant, but if calculated at 70% of the current price, it would be equivalent to Jiangnan Province being able to obtain 20 million tons of iron ore at the price before the price increase. Damn it, this is more than one billion yuan saved.

"If you do this, wouldn't the loss be too great?" Fan Heng asked after a long pause.

Although the purpose of his son's actions is not very clear to him, the real profit transfer is indeed clear. Such a large business will only make Jiangnan Province more special and more valuable compared with other provinces. ability.

Fan Wubing said, "This price is kept secret, but once the order quantity is determined, Fan's Iron Ore Investment Company will have a firm foothold in Western Australia."

For foreigners, contracts are sacrosanct. Once your company obtains a huge order, investors will flock to it with interest. Now the Fanshi Iron Ore Investment Company in Western Australia is brewing. Listing financing in Australia, if such a large order is suddenly signed at this time, the listing process will definitely become very simple.

This is a kind of empty-handed approach. It only needs to invest a small amount of capital in the early stage to start the entire project, and then use the power of orders to attract a large number of investors, and raise funds for later construction through the issuance of stocks to resolve the problem. own investment risks in this project.

It can be said that Fan Wubing's investment in this project will not exceed 300 million Australian dollars, and if it is run properly, the company can raise billions of Australian dollars through the issuance of shares to maintain subsequent projects. In other words, Once a company is successfully listed and financed, it will be in an invincible position.

Even if the company is directly transferred, it will be enough for Fan Wubing to easily earn billions of Australian dollars, or more.

Fan Heng was a little dizzy by his son's set of capital operation methods. Although he had been studying economic knowledge very carefully, he was still a little confused in the face of such high capital operation methods. Know the doorways inside.

However, Fan Wubing didn't have much interest in explaining it to him in detail, because the process is simple to say, but there are still many skills to operate, especially grasping the timing and grasping the investor's psychology, which are very important. .

People without a strong foundation in capital operations cannot engage in such a large business. This is why although there are many players in the capital market, there are very few people who can make a name for themselves and eventually achieve success. The god of stocks is Buffett, and finance The giant crocodile is just Soros, and the principle is the same.

"Well, anyway, I have figured out one thing." Finally, Fan Heng touched his chin and said to his son, "Jiangnan Province can save one billion yuan by signing this purchase contract. Even if it sells the iron ore to others, it will be It’s profitable. But you won’t suffer losses. Instead, you will gain popularity from investors and get huge returns from the capital market, right?”

Fan Wubing nodded and replied, "That's right, that's pretty much what it means."

"Then how should we cooperate?" When Fan Heng thought that another great political achievement was about to fall on his head, and it would also be of great help to his son's career, he felt a little eager to try, so he humbly asked for advice.

"This matter still needs to be discussed in the long term. The most important thing is not to let any news out before. When the time comes, we will throw out this contract, otherwise we will not achieve our goal sooner or later." Fan Wubing replied.

Fan Heng nodded, convinced that confidentiality is naturally the first priority. This is not only necessary in international business, but also crucial in domestic business activities.