I See through Everything

People who love durian can easily eat a pound or two of the flesh in a single day.

Many people don’t dislike durian; they’re just short on cash.

Jiang Miao thought for a moment, then picked up a slice of beef shank—cut as thin as a cicada’s wing—and swished it in the clear broth. After taking a bite, he said with a smile:

"Sis, after the New Year, I’m going to have to trouble you with something. Head to the various cities in the Pearl River Delta Region and start buying up street-front shops."

"We’re not going straight to wholesale?" his sister asked, pausing her chopsticks.

Jiang Miao shook his head. "No. If we don’t have our own retail stores, we’ll be at the mercy of wholesalers. They’ll eat up all our profits."

He knew all too well how low wholesalers’ farm-gate prices were. Vegetables from Qilu Province, for instance, were often bought for just a few mao per pound at the source. But by the time they reached consumers, the price would jump to several yuan per pound, or even more than ten yuan.

If it hadn’t been for the rise of e-commerce in recent years, many growers would have had no bargaining power at all.

Just because Hailufeng Company was mass-producing durians didn’t mean they were guaranteed to make a fortune. The moment those wholesalers and distributors saw such a huge production capacity, they would definitely push the price down.

Relying solely on online sales from the e-commerce division was clearly not going to be enough.

Therefore, Hailufeng Company had to leverage its geographical advantages.

Shanmei City was in a coastal area, bordering the Chaoshan Region to the east and the Pearl River Delta Region to the west. To the north, it connected to Chacheng City and Kedu City. Sea routes also provided access to the eastern and southern coastal areas.

The Pearl River Delta Region in particular, the heart of the Lingnan Region, was a retail market that Hailufeng Company had to conquer.

His sister inquired, "Ah Miao, what’s the approximate budget?"

"One billion. We need to ensure every city has at least one 100-square-meter specialty store. At the same time, we’ll buy land in the suburbs of those cities to build a 20 to 50 mu cold storage warehouse," Jiang Miao stated directly.

"That much?"

"It’s not that much. In the core districts of Yangcheng and Peng City, shops go for 200,000 to 300,000 yuan per square meter. A 100-square-meter shop would cost 20 to 30 million."

Jiang Miao didn’t like renting. After all, when you rent, you have to deal with landlords raising the rent every year. And those landlords were as shrewd as they come.

For example, the landlords near Penguin Company would collectively raise their rents the moment they heard Penguin Company was giving out raises.

If they chose to rent, and Hailufeng Company’s specialty stores did well, those landlords would one hundred percent use it as an excuse to demand a rent hike.

He would rather purchase the properties outright than have to deal with those landlords and sub-landlords.

Besides, purchasing real estate in the Pearl River Delta Region was also a long-term investment. Even if the specialty stores failed in the future, they could still be rented out.

To Hailufeng Company, five hundred million was just one month’s gross profit.

Especially since, starting in January, White Truffle production was set to soar to 120–150 tons per month.

Currently, high-end food distributors from all over the world were flocking to place orders for White Truffle. At an average price of around 2,500 yuan per kilogram, this meant Hailufeng Company’s monthly revenue would increase by 300 to 375 million yuan.

White Truffle would become Hailufeng Company’s second most outrageously profitable venture, second only to eel fry, with a gross profit margin of around 90–95%.

This gross margin was similar to that of the eel fry.

The reason for the low cost of eel fry was that Hailufeng Company had begun raising mature eels themselves. They also had highly efficient feed, and the female eels, which were culled after spawning, were used to produce soft-canned goods, which further increased the gross profit margin.

Thus, Hailufeng Company’s enormous monthly profits provided a massive boost for its rapid expansion.

As for building warehouses in the suburbs of the Pearl River Delta cities, this was to account for the fact that many of Hailufeng Company’s products—like durian, strawberries, fish balls, eel, White Truffle, and fish feed—required freezing and refrigeration. If they could maintain a cold chain for the entire transportation and storage process, the shelf life of the products could be greatly extended.

Although Shanmei City was very close to the Pearl River Delta, it was still best to set up a network of cold storage warehouses.

Although his sister was a little surprised by Jiang Miao’s bold move, she also knew the company’s current profitability was excellent, and investing in property was a good move.

"Then I’ll head over after the New Year."

Jiang Miao reminded her, "Sis, you should work on a staffing plan over the next few days. Have the HR department pre-hire the necessary people so you can take them with you directly. That way, you won’t be scrambling when you get there."

"Okay."

"Right, I’ll also approve another 500 million for you. Use it to buy some relatively cheap apartments in the suburban-urban fringe areas of the Pearl River Delta, near the shops and warehouses, to use as employee dormitories."

"Is that necessary?" Jiang Xia had some reservations about this kind of investment.

Jiang Miao shook his head. "There’s no end to the money we can make, but people’s loyalty isn’t easy to win. We’re taking these employees from their homes to the Pearl River Delta, so we have to consider their needs. Otherwise, with a salary of three or four thousand yuan, our entry-level staff won’t be able to survive there."

"Instead of giving them subsidies later, it’s better to be more direct. The company will buy the apartments and let the employees live there for free. We’ll also cover their food and commute. Anyway, if we don’t need the properties later, we can rent them out or sell them."

His brother-in-law, Zhang Xincheng, nodded in agreement. "Ah Miao has a point. If we make the employees rent on their own, we’d have to give them a raise. That money would just end up in the landlords’ pockets anyway. It’s better for us to take on the cost upfront and buy apartments for employee dorms."

After all, rent in the near suburbs of Yangcheng averaged about 24 to 30 yuan per square meter per month. Even if several people shared an apartment, the monthly rent would still be a significant expense. And to maintain a decent quality of life, each person needs at least 20 square meters of living space.