On the evening of October 26, right after the Lin family and Li Futao’s people completed the final gold transaction worth 45 million US dollars, Li Yi had Huang Lixing bring Lan Xinyi to the Li family’s small villa for a secret meeting.
The purpose of this meeting was primarily for Li Yi to understand the company’s current operational status and formulate a plan of action for the next phase.
According to Lan Xinyi’s report, Starry Sky Company was thriving. The assets under management of its Da Hai Private Equity Fund had reached 7.9 billion Hong Kong dollars, an increase of 700 million Hong Kong dollars from two months prior.
Of this amount, 7.2 billion had been converted into U.S. dollars as per Li Yi’s instructions and deposited in major banks, earning interest while awaiting the dollar’s appreciation to profit from the exchange rate differential.
Currently, as the international situation evolves, uncertainties and risks in Hong Kong are rising, directly leading to a severe depreciation of the Hong Kong dollar.
The current exchange rate between the Hong Kong dollar and the U.S. dollar has risen from 5.06:1 two months ago to 7.12:1, representing a depreciation of over 40%.
In other words, if Star Company were to withdraw the US dollars deposited in the bank and convert them back into Hong Kong dollars, its profit would reach 40%.
This rate of return is staggering, surpassing nearly all financial products currently available on the market.
More importantly, the Hong Kong dollar’s depreciation continues unabated, with no signs of stopping, and no one knows how far it will fall.
In short, the greater the depreciation of the Hong Kong dollar, the more Star Company stands to gain.
In addition, the company has borrowed over 7 billion Hong Kong dollars from major banks using time deposits as collateral, and has invested all of it in gold financial products.
When they first purchased these assets, the international gold price was only $250–270 per ounce; later purchases were made at slightly higher prices, but still did not exceed $290 per ounce.
However, the international gold price has now soared to US$595 per ounce, and just a few days ago it even reached US$598.
A rough calculation shows that their profits from the gold project have now exceeded 7 billion Hong Kong dollars.
In light of this, Lan Xinyi decisively decided some time ago to quietly offload her holdings and gradually close out her positions.
After all, the value of the gold financial products they hold is simply too high, exceeding HK$14.5 billion.
With such a large holding, they can only sell off their positions gradually; they cannot dump the entire lot onto the market at once, as that would likely cause severe price volatility.
To date, under Lan Xinyi’s leadership, Starry Company has already sold over 7.5 billion Hong Kong dollars’ worth of gold financial products on the market.
Even so, they still hold over 7 billion Hong Kong dollars’ worth of financial products waiting to be sold.
Of course, the company has had both good and bad news. Aside from these positive developments, Lan Xinyi also shared two troubling matters with Li Yi.
The first issue was the smear campaign launched by the British-owned conglomerate against Li Yi personally and the company, which has had a significant negative impact on the company.
Since the British-owned conglomerate controls two-thirds of Hong Kong Island’s media—particularly several television stations with which they maintain close ties—they have been using their media influence to continuously slander and smear Li Yi.
Many investors, unaware of the truth, began to doubt Starry Sky after seeing these smear campaigns, which severely impacted the company’s operations.
Originally, in August and September, Star Company was able to attract three to four hundred million Hong Kong dollars in venture capital each month, showing very strong growth momentum.
However, since the start of October, it has raised only 150 million Hong Kong dollars, a decline of over 50%, which has caused Lan Xinyi and others great concern.
After all, as an investment firm, while investment profitability is certainly important, the amount of capital raised is equally crucial.
The company’s second major headache is the losses from its real estate projects!
The real estate projects they took over from the Li family some time ago have, without exception, seen their prices plummet due to the broader market conditions.
Although their acquisition price was low to begin with—they bought real estate projects worth 1 billion Hong Kong dollars for just 600 million—the 400 million profit has now been wiped out by the plummeting property prices.
Moreover, property prices continue to plummet. According to industry experts, prices must fall by at least another third from current levels before a rebound is possible.
In other words, if they don’t sell these real estate projects promptly, they will continue to incur losses in the future.
So, whether to cut their losses and exit or continue holding has become a dilemma facing everyone.
There is currently significant disagreement within the company regarding this matter.
Some argue for cutting losses and exiting the market promptly, citing the fact that property prices across Hong Kong Island are currently plummeting with no sign of a bottom or recovery in sight.
Furthermore, under the smear campaign by the British-owned conglomerate, the company’s seven current real estate projects have been dismissed as worthless; even if property prices rebound in the future, there may be no buyers willing to purchase them.
It would be better to sell them off now, before we lose our principal.
However, others believe we should hold on. After all, property prices have already fallen this far—how much lower can they possibly go?
Given that, it might be better to hold on and wait for prices to rebound.
With both sides firmly entrenched in their views and unable to persuade one another, the decision ultimately rests with Li Yi.
After assessing the situation, Li Yi immediately laid out the company’s next steps.
First, they must accelerate the sale of these financial products and ensure that all holdings are completely liquidated and exited by November 5.
However, the specific method of disposal would be determined upon his further notice.
Second, regarding real estate projects, you must continue to hold onto them and keep injecting capital to accelerate construction progress.
Don’t worry about losses—no matter how much money is lost, you must not stop!
When Li Yi took over the Li family’s real estate projects, he knew they wouldn’t turn a profit in the short term—at least not within the next two years.
But even so, he took them on.
On the one hand, they needed to send a message to the Li family at the time: spending 600 million HKD to acquire real estate worth 1 billion HKD was a way to teach Li Jiuying a lesson and vent Old Huang’s frustration.
On the other hand, Li Yi saw the potential in the Li family’s real estate holdings!
Li Jiuying actually had quite good business acumen; all seven of the Li family’s real estate projects were built in prime locations in the heart of the city.
In particular, the commercial CBD project near Lower Albert Road was especially coveted.
The area is already thriving now, but compared to what it will be in ten years, it’s still a far cry. After all, that location would later become the renowned Central District on Hong Kong Island—the absolute heart of the island.
Furthermore, don’t be fooled by the fact that property prices on Hong Kong Island have plummeted by half—it seems as though the real estate industry has fallen into decline overnight.
But this is merely a process of deflating the real estate bubble, and the decline is limited to ordinary residential properties; real estate projects in the true core areas remain highly sought after.
Most importantly, no company is willing to sell off these prime properties.
So, it’s okay to take a loss now; with core real estate projects like this that have such huge potential, you won’t be able to buy them even if you wave cash in the air later on.
After settling these matters, Li Yi spoke with Li Jiuying on the phone again.
This time, Li Yi instructed Li Jiuying to resume gold shipments starting tomorrow, increasing the daily volume from the current 50 kilograms to 100 kilograms, and to add another 50 kilograms each day thereafter.
Although she didn’t understand why Li Yi was doing this, Li Jiuying knew the time had come to strike back.
Immediately, he had the 1.1 tons of gold transported from the Wan Chai Pier back to his own warehouse and ordered all his gold shops to post notices announcing an increase in gold supply!
The moment this news from the Lai family broke, it caused quite a stir…
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