Li Ka-shing has been selling Hong Kong and mainland assets for some time

Li Ka-shing, Asia's richest man, has been selling Hong Kong and mainland assets for some time, causing rumours of "divestment" and even forcing him to appear in person for clarification. But the public will not really become a Superman obstacle, the past week, his power industry announced to split the Hong Kong Electric Light listing, the market is also reported that Watson will be in the next year independent listing.

From the beginning of the year trying to sell serviced residences, to asset injection of real estate trusts, the sale of Sino-Hong Kong business, and then to the new business listing, although some people have been identified as "divestment", but more people have realized that this is the long and the department in the transformation of the economic form launched a new round of capital operation.

In Hong Kong, long and the Department of Enterprises in the past 20 years, regardless of prosperity, adversity, or even business losses or economic crisis have been known to maintain profitability, the broad layout and diversified business type for Li Ka-shing's capital maneuver created space. One of the most sophisticated businessmen in the global "financial technology" is now mobilizing its troops in the territory he can defend.

First of all, but also the most exciting external nerves of course is the sale of business. Two months ago, Huang revealed that he wanted to sell Bojia supermarket, who had been with Hong Kong people for 40 years. The rationale for Mr Li's sale was simple--the second-largest supermarket in Hong Kong, where fresh food sales accounted for more than 40% per cent, and a whopping 345 of the big China stores had a profit of only HK $800 million last year. Gross margin is too low in the high growth of the Watson Group has become a burden, and then take into account the recent news of the Watson's listing, it is not difficult to understand why Li Ka-shing can not accommodate hundred.

The second step, after selling the business, is to put capital into new business. Li Ka-shing, holding huge sums of cash, will never be free to sell, but will always adhere to the principle of low prices and high returns. In the previous column, the author has cited many examples of his "bottom up" overseas, in fact, the Hong Kong Light (HEC), which is about to be spun out in the near future, is also a wonderful story.

30 years ago, Li Ka-shing, with 2.9 billion Hong Kong dollars to "bottom up", to the financial plight of the land group to buy HEC 35% of the interest, the evolution to today's electricity industry market value has exceeded 140 billion Hong Kong dollars. The Hong Kong Government, in order to stabilize electricity prices while safeguarding the operation of the power companies, legislation allows the power companies to enjoy net fixed asset 13.5-15%, which means that the company makes 13.5 bucks for each 100 yuan. We can imagine the HEC's crazy expansion, Leo, flowers, more than 20 years! Unfortunately, the world is easy to move, as the electricity market is about to open, the total electricity consumption in Hong Kong has been reduced, and the return of 13.5-15% has ceased to exist. In the Superman family, the HEC is like an impending beauty, although still graceful, but do not "marry", I am afraid the love is difficult to ask.

This is the third major category of Li Ka-shing's capital maneuver: a spin-off. Mature operation, a smooth growth, especially with high cash flow can be used to dividend business, Li Ka-shing is the best listing financing tools, but also the most popular market. The HEC is such a typical.

However, the long and Department of the most like to split the listing is undoubtedly the real estate industry. Most of the development of mature real estate projects do not have much profit growth space, but there is a stable rental income, split listing easy access to financing. The real estate Trust method can be listed with dividend-paying to attract investors, and will not threaten the control of the industry, it is Li Ka-shing's favorite.

Finally, Li Ka-shing played "financial skills" not only to expand financing, but also due to his vigilance on the debt rate. The market is widely expected to exit quantitative easing next year, the second half of next year will be a significant increase in interest rates, greatly increasing corporate debt burden. Current and yellow debt ratios have reached 32%, splitting the HEC's power industry debt ratio is also close to 30%, if the number of associated companies to calculate the liabilities, the long and the department needs to share the total debt may be several times higher, at the same time, only two years after the Ming 87.2 billion Hong Kong dollar debt expires. Analysts believe that at least a 150 billion Hong Kong dollar debt can be cut at the rear of the chain, and nearly 50 billion of the debt will be transferred after the split-port light is listed below 50% per cent.

Li Ka-shing is always making money. Many people think that the "Superman" investment vision is accurate and never wrong, which is obviously impossible. In the past decade and Huang only invest in 3G business has lost hundreds of billions of Hong Kong dollars, in exchange for others have long been closed down, but and Huang not only did not close, and even always keep profits-business diversification, the use of capital "financial skills" is actually the real secret of Li Ka-shing.

The following is a transcript of an interview with Li Ka-shing by the 07 global business and Businessweek in the interview, Li Ka-shing talked about why he spent 90% of his time thinking about failure, he shared three principles of enterprise management, and talked about his belief in the "good for, divided, no disease and speed, inaction" business philosophy. A lot of dry goods may inspire you.

"I spent 90% of my time considering failure."

Q: How do you not capsize in bold expansion over the years?

Li Ka-shing: Think of you in a sunny time, if you are driving a wind-driven ocean-going ship, when you leave the port, you have to think in case of the hoisting of the No. Tenth Wind Ball (press: Hong Kong to represent typhoon intensity, tenth is equivalent to a strong typhoon), how you deal Although the weather is fine, but you still have to estimate, if there is a typhoon, before the storm has not left, what do you do?

I will keep studying every project to face the problems that may occur under the bad situation, so it often takes 90% to consider failure. Because of this, over the years, since 1950 to today, the Yangtze River (industry) did not meet the loan tension, never. The Yangtze River (industrial) market today, assuming that shareholders take a dividend and buy long real, (now) make more than 2000 times. is to take (dividend), no longer buy the Yangtze River (industry), the stock also exceeds 1000 times times.

Q: 90% considerations fail? Why do you spend so much time trying to fail?

Li Ka-shing: You must first think of failure, once we Chinese have a word to do business: "Do not buy first want to sell", you have not bought, you first want to how to sell out, you should first think about how to fail.

Because the effect of success is 100% or 50% of the difference is not too important, but if a small loophole is not early repair, may bring great damage to the enterprise, so when a project loss, even if the amount involved is not large, I will discuss with the relevant departments to solve the problem, The time spent and the spirit of the multiplier is far beyond proportion.

I used to say that a mechanical watch, as long as one of the gears has a bit of a problem, your watch will stop. A company is also an institution that can fail if it has a weakness. Know the details, often in advance to prevent the occurrence of the crisis.

Q: What details do you have to stare at closely?

Li Ka-shing: The percentage of cash flow and corporate liabilities is the most important part of my company, and it is a key health indicator for any firm. In any developing business, make sure that you have a positive cash flow for your performance.

Q: 90% Consider failure, can you say, the ability to predict risk in all directions?

Li Ka-shing: It can be said that, like the Army's "commander-in-chief" must consider the retreat. such as the commander-in-chief of a small country, own 20,000 soldiers, when planning to capture other cities, he must prepare twice the soldier, is 60,000, because the war is activated, there may be many unexpected changes; once the war has been defeated, the country also has more than normal period of more than one times the strength of defense enemies.

Any business must consider their ability to balance risk, smooth sailing is impossible, in the past I have encountered many political and economic fluctuations in the business. I often remember that the world is as fickle as the general, so plan for the future in a calm, careful study of possible surprises and solutions.

Q: You put a lot of emphasis on risk, but what outsiders are noticing is that the Yangtze group has been in crisis for decades, and why is your daring move not a lethal risk?

Li Ka-shing: This is actually the time to grasp the ups and downs of the market cycle, it is also possible to take into account factors related to international economic, political and livelihood issues, such as the fact that the booming supply and demand cycle of real estate has reached its peak, and that it will almost inevitably fall, and because of the shift in industrial base, the need to think about increased investment and the greatest technological need, etc. In response to different projects to find the fastest way to achieve business goals, prior to the need to undergo meticulous rigorous investigation.

To thrive in a slump is to see a lurking crisis when the market is strong, and when it comes to dealing with it temporarily, there are a number of conditions that need to be met.

Q: What do you mean by a certain condition?

Li Ka-shing: The key is to do enough preparation time, and to balance risk. I have often said that "prudence" is also an art, that it is able to grasp the right time to make swift decisions, but this is not an excuse for indecisive and stagnation.

To run a larger enterprise, it is important to realize that many people's livelihood conditions are closely related to their business, so prudent management attitude is of great importance, for example, when there is a takeover case, all the cash needed must be prepared beforehand.

I was more careful, once through poverty, how to risk? You see a lot of people on a whim, suddenly become poor, I will never do this, are at every step. There is a word that I firmly remember: "Poor easy, poor business sad", you are poor, you can not eat good white rice, you may buy the cheapest rice, or you can, people eat meat, you can eat vegetables, the cheapest food; but poor business is difficult, very difficult. So be careful, you can say, on thin ice.

"I can stick to the three principles."

Q: You say there is no formula for success, but if you must say three principles of success, what will it be?

Li Ka-shing: First, you do which industry, must pursue the industry's best knowledge, information, the best technology is what, and must be in the best state.

Second, efforts, perseverance (aides added: Mr. Li said that effort, perseverance is not the traditional meaning of the literal, is best effort, to achieve the ultimate). However, it is very important that if an organization does not have the knowledge related to this industry, if you judge wrong, even if you work hard and have perseverance, you will fail too much.

The third is to establish a good system and talent.

Q: You have just mentioned that you have to have the latest information, but there is a system, but your business from the retail trade, port transport to the oil industry, the kind of comprehensive, how to use the system management?

Li Ka-shing: Now is a pluralistic era, the four sides of the eight challenges many. With our business in 55 countries, the company's structure and corporate culture must take into account the expectations and concerns of colleagues from different places.

So flexible architecture can transport life force for the group, but also can give the management of different business self-development vitality, and even let them compete with each other, and constantly look for the best development opportunities, to bring the company best interests. The company must have a sound governance code and clear guidelines before it can ensure creative space. For example, in the past ten years, there have been many different creative organizations and management staff, and they have performed well, all items are of great potential and good profits.

We must know that the larger the enterprise, the single instruction and behavior is not feasible, because it will limit the different management class, play his professional and experience.

Let me give you an example. In 1999, I decided to sell the Orange (press: A British telecommunications company originally owned by Hutchison Whampoa Group, after selling it at a high price), and the management advised me not to sell it or even to buy another company two months before selling it. I gave them four conditions: if they could do it, they would do it their way.

The object of acquisition must have sufficient flow of cash; second, after the completion of the acquisition, the debt ratio can not be increased; Orange issued new shares to carry out the acquisition, and Huang still have to maintain a 35% stake, I told them that 35% stake not only protect and yellow interests, but also protect the interests of all Orange shareholders; Have absolute control over the acquisition of the company.

They were delighted to hear it and agreed with the four principles that they would be able to make acquisitions within the four-point range. They cannot, of course, be able to do so.

I set up four coordinates for orange admin to let them know this coordinates clearly, this is the company's principle, then he went over there to develop, in these four principles to play talent. But not beyond my four coordinates (four coordinates in the air).

This is just one of many examples, in fact, in the long real, and yellow group, we have a lot of subsidiaries, I will be in line with each company's business, business environment, financial situation, market prospects, and so on, give them different coordinates, so that management in the coordinates within the flexible play.

Q: You mentioned that the third principle of business success is talent, how do you define good people?

Li Ka-shing: Successful managers should be bole, constantly in the selection, extended to recruit smarter than him, but some people must avoid. It is absolutely impossible to pick the famous "corporate Star". Enterprises can not afford those impostors, yes or discouraged employees, but also can not tolerate the self acting as the starting point of the business star.

My experience is that the choice of team, loyalty is the basic, but it is more important to keep in mind that the light of the loyal but low capacity of people or the low moral level of sooner or later the team, wear down the enterprise, is the most unreliable person.

So build a team that is working together. The first rule is to listen to the sound of silence, ask yourself if your team has any fun with you, and you can be open-minded, fair, magnanimous, and recognize the dignity and creativity of everyone, but I want to remind you of the principles and the coordinates, not that you should be a persistent person who is too time-consuming to overdo it.

May be the background of my juvenile anxiety, can let me in a short period of time easier to judge the advantages and disadvantages of a talent, from the side guide, play its director.

Q: After more than 50 years of boss, for management, leadership, you have a deep understanding of the "management of the art" to address, can you analyze the difference between the boss and the leader?

Li Ka-shing: I do not dare to compare with those management masters, I do not have the opportunity to go to school, life-long efforts to self-study, hard pursuit of knowledge and learning, management has no art to say? I have my own experiences and experience.

I often ask myself, do you want to be a team boss or a team leader? Generally speaking, the boss is much simpler, your power is mainly from your position, this may be the fate of God or with your efforts and professional knowledge. Being a leader is more complicated, and your power comes from the charm and appeal of human nature. To be a successful manager, attitude is as important as ability. Leaders to lead the people, to urge others consciously willing to hard, the boss only know how to dominate people, make others feel small.