MTL - Reborn Capital Empire-v2 Chapter 734 The future of Kwok's business
Chapter 734: The Future of Guo's Business
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When Burger King was acquired by Guo's, it was one of the top three fast food brands in the United States, with 16,000 stores. But most of them are franchise stores. Since being taken over by Guo's, Burger King in North America has not opened up many new stores, but the proportion of self-operated stores originally less than 10% has increased rapidly. With the continued popularity of real estate in the United States, Burger King's investment in real estate has not only eliminated rent expenses, but also increased cash flow. At the same time, it also allows its own return on fixed assets to grow at a rate of 20% per year.
Since the acquisition of Burger King in 2002, it has increased the scale of its own stores in the form of almost 100% debt. The intensity was so great that the media once ridiculed that Burger King had changed from a fast food restaurant to a real estate company.
But now there are 7,584 Burger King self-operated stores around the world, and the real estate value of 1.896 million square meters exceeds 24 billion US dollars, and it is still improving with the continuous development of the global real estate market. The high debt ratio, along with the excellent performance of Burger King's balance sheet, has become a classic case of Harvard's business class.
"Katherine, the Huaxia market is no better than the United States. With a history of 5,000 years, it has formed a unique dining culture. Therefore, in addition to the sufficient number of stores, Burger King also provides more abundant meals according to the tastes of the Chinese people. For example, the Chinese people Frequently eaten soy milk, steamed buns, etc. Don’t be stubborn about traditional burgers, fries and fried chicken, otherwise it will be difficult for us to really gain a firm foothold in the Huaxia fast food market.”
"...In addition, the qualifications of franchisees must be strictly reviewed. For any franchisee, they must go through our strict training before they can officially open for business. In addition, it is necessary to check the quality of food supply and service quality of franchisees from time to time. The annual franchise fee of tens of thousands of dollars will deplete the goodwill of Burger King.”
"Don't worry, Bruce, I know all this."
Guo Shouyun nodded.
"In the retail business, after five years of development, we now have 6,370 Baccarat branches in the United States. Among them, 2,329 are our own stores, accounting for 36.56%. Although there are still 20 days in 2004, Baccarat's operation this year is still 20 days. The total revenue will exceed 13 billion US dollars, and the net profit will be 1.927 billion US dollars.”
"Next year, we plan to have more than 8,000 Baccarat stores and officially enter the entire North American market. In the next three years, the number of stores will exceed 13,000, making it the largest community supermarket chain in the Americas."
Looking at the ambitious Catherine, Guo Shouyun smiled and nodded.
"It's a grand plan, but I hope that in the next three years, in addition to Burger King's China business, including Baccarat, we can give up investment in self-operated stores."
"Abandon the self-operated store, why?"
"Katherine, real estate prices in the United States are already too high. Compared with 2002, the real estate prices in the central urban areas of major American cities such as San Francisco, Los Angeles, and Houston have increased by 94.7% compared with the past, nearly doubling. Such rapid growth has made the United States The potential of real estate has been completely overdrawn. Moreover, financial institutions in the United States are constantly lowering their loan review standards, and even they have no standards. As long as they are American citizens, no matter whether they have income or not, they can borrow money to buy a house. This is ridiculous. already."
Guo Shouyun shook his head and continued: "Although no one knows when the ever-expanding real estate bubble in the United States will burst, there is no need for us to run in at this time to be a 'pan man'. Temporarily abandon the expansion of self-operated stores and reserve more The more cash flow is to buy the bottom when the real estate inflection point comes after the crisis, and the price we pay at that time will be much lower.”
“In addition, in November this year, the Fed’s federal funds rate has been raised to 3.75%. Continued high debt expansion will put us under huge repayment pressure. Therefore, a temporary hibernation is necessary, and we are for a better future. "
Catherine, who graduated with a master's degree in business administration from Harvard Business School, has become an excellent business manager after five years of experience in the business world. Guo Shouyun's words gave her a lot of inspiration, and some issues that she didn't pay much attention to usually reappeared in her mind, giving her more hints.
"Then why separate the Huaxia market?"
"Old Liu, it's up to you."
The latter did not refuse, "because compared with the fully mature real estate market in the United States, Huaxia's real estate is an incremental market. With the large-scale urbanization movement generated by the rapid economic development of Huaxia, new citizens migrating to the city will need to Tens of millions of commercial houses. Her real estate price index will not drop until the high-speed development of China's economy is over. Judging from the current global development situation, China's economy will not encounter setbacks in at least three to five years. Therefore, There is no need for Guo's to stop the expansion of its self-operated stores in Huaxia."
Now Liu Zhixing has completed his Ph.D. study in economics at Stanford University, and his graduation thesis "The Contribution and Efficiency of Finance in Economic Development" has also appeared in the top economics magazine "US Economic Weekly" in the United States. Just received dozens of invitations from top universities in the United States and research institutions of Wall Street financial companies.
Not to mention Guo Shouyun. Over the past five years he has used his success in the financial sector to gain numerous reputations. "Son of God", "Financial Wizard" and other nicknames, Catherine has already heard the cocoon in her ears.
Both believe that the U.S. real estate industry is facing a crisis and naturally has enough persuasion.
"Real estate is the backbone of the U.S. economy. Once the turmoil will inevitably lead to a stock market recession and economic stagnation. If this is the case, should we slow down the development of all businesses, or even maintain the current scale, and first reduce the debt ratio through profitability. come down."
After 9/11, the U.S. federal funds rate dropped to around 1%, and commercial loan interest rates dropped to an unprecedented level. Seizing this opportunity, Guo's Business Group is expanding its business with almost 100% debt.
In addition to the Baccarat and Burger King already mentioned. Now more than two years later, Guo's Farm has owned 5.06 million acres of land; there are 173 non-owned franchise farms with a land size of 3.79 million acres; all over 50 states in the United States.
Guo's business is now the world's 12th largest private landowner, behind Jeremy Bayard's Ace Agriculture, which owns 3.28 million hectares of land in Australia and is engaged in dairy farming.
And the world's largest non-government landowner is the Roman Catholic Church, with an incredible 71.6 million hectares in countries such as Germany and India, an area larger than France.
Therefore, Guo's Farm still has huge room for growth.
With the rapid expansion of agriculture and animal husbandry, the number of Guo's slaughterhouses has also been greatly improved. After more than two years, through acquisition and new construction, the number of Guo's slaughterhouses has increased from 46 before 9/11 to the present. 157; the annual slaughtering capacity has increased from 720,000 in the past to 3.19 million now, covering all large livestock including cattle, sheep and pigs.
Moreover, additional services such as segmentation and vacuum packaging have been added.
Of course, such a slaughtering scale is immeasurable compared to the Crown, Brazil **s and other multinational giants with the capacity to slaughter tens of millions of large livestock at every turn. But it meets the daily demand for fresh meat products in Baccarat's 6,370 stores.
In addition, the current Guo's fresh food processing is not only the slaughtering business of large livestock. After the acquisition of Sanderson Farms, Guo's fresh processing business has the latter's 8th in the world and 5th in the United States, with an annual poultry slaughtering capacity of 476 million. And it has also entered into a company that produces and manages raw eggs, egg products, breeding eggs and chicks.
In addition to slaughtering, Guo's Fresh Processing has also acquired some oil refineries, flour processing plants and grain storage institutions, expanding a richer fresh processing industry chain.
In the field of logistics, except for the shipping business that has not been involved in. Guo's logistics focuses on the development of land, currently has 3,733 large trucks, 27,000 medium-sized trucks; 132,700 small trucks, including refrigerated trucks; 113 b747-400f, b757-200f cargo aircraft.
There are 379 warehouses in fifty states in the United States.
In just over two years, the size of Guo's Business Group has nearly tripled!
Assets have increased from $15.386 billion before 9/11 to $62.745 billion now. The total revenue of the group has also increased from US$6.23 billion before 9/11 to US$26.173 billion now, and net profit has increased by 2.5 times, from US$1.62 billion before 911 to US$4.05 billion now.
Such rapid expansion also comes at a price. 81.37% of the total assets of the Kuok Business Group of US$62.745 billion are liabilities. It is also fortunate that the US real estate has been rolling upwards in recent years~www.novelbuddy.com~ Otherwise, the debt ratio of Guo's business will be higher.
Of course, the high debt is also due to the abundant cash flow of Guo's business. Most of its assets are farms, slaughterhouses, real estate, vehicles, warehouses and other heavy assets. With enough collateral, it is of course easier to borrow enough funds to expand the business chain.
In addition, the existence of Phoenix Bank also provides some support for Guo's rapid expansion.
Facing Catherine's question, Guo Shouyun nodded.
"It is no longer a wise move to continue borrowing to expand when the federal funds rate has risen sharply. What Guo should do now is to consolidate the assets obtained after these years of rapid expansion, integrate the internal, improve the enterprise management system, increase cash flow, reduce Liability ratio. Dormant, wait until the U.S. economy is turbulent and the stock market turns at a turning point, and then enter the market to hunt for the bottom. At that time, the federal funds rate will fall again. During the crisis, the price of assets will also be very cheap. Whether it is mergers and acquisitions, the industry Expansion is a rare opportunity for us.”
"This kind of understanding is good. But the key is when will the market inflection point appear? We can wait a year or two. But in three or four years, should we continue to wait?" Katherine asked.
