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It is said that this company wrote about it two years ago, but the curtain attracted tens of thousands of visitors. However, the owner, Gao Tian, did not see its future prospects, believing that its unique advantages in Causeway Bay were irreplaceable. Two years later, the momentum of Qide Su indeed declined, but what was not expected was that even Causeway Bay seemed to be in crisis. According to reports, So No Company International is now facing pressure and needs a month of water. Gao Tian wrote an article titled "Cannot Have Gold Without a Future," summarizing that the company's financial difficulties are mainly due to three major drags. And the legendary status of Causeway Bay will probably become history, difficult to rely on market news. International is facing a severe funding gap, needing to complete a financing of 6.75 billion. They are in talks with several banks, but there is still a funding gap of about 2 billion, accounting for about one-third of the target. The toy company said that International must open its doors within the period, including finding new lending institutions to join the arrangement and understand this new financing will use the Causeway Bay property as collateral. The brothers have always been strong and capable, plus they control two major important properties in Causeway Bay, So and Desu So. Under such circumstances, the news of the company's financing difficulties this time has surprised market participants. I believe many people still remember that in the past, International was privatized at a price of approximately 1.89 billion per share, with a valuation of about 7.5 billion. That privatization was considered a bargain by market participants because the valuation of the Causeway Bay assets held by the company had already approached 20 billion. Unexpectedly, in just three or four years, International is now in trouble. Even using Causeway Bay as collateral may not be able to complete the financing of 6.75 billion. The company's easy transfer of shares indicates that International's current financial difficulties are mainly due to three factors. First, as mentioned two years ago, the company acquired a twin-tower project in 2016 for 7.388 billion yuan, with a total project investment of 15 billion. At that time, the Chinese and Hong Kong economies were booming, and the local consumption market was very strong, with an unemployment rate of only about 2%. Severe labor shortages led to the creation of CBD2. You can see that the market situation was urgent. After the outbreak in 2019, the Chinese and Hong Kong economies slowed down, coupled with the impact of e-commerce trends, the dual-use property became over-controlled. The Hong Kong government's positioning of CBD has basically disappointed. A large number of land parcels have been changed to simple public housing and youth hostels. You can see that Desu is now being supplied by Qide Chenglang Village. When the land was acquired in 2016, the imagined huge investment led to a sharp increase in International's debt. According to the annual report, as of the end of 2015, the company's total debt was about 15.7 billion, with a debt-to-equity ratio of about 34.6%. However, in the following years, the debt increased to 20.3 billion, and the debt-to-equity ratio soared to 56.0%. Furthermore, even if the project's operating performance is ideal, the financial burden pressure in the past one or two years after privatization is probably even greater. Of course, even if it is bad, with its strong foundation and holding the super golden goose of Causeway Bay, there should be no problem with water. The problem is that in recent years, the local physical consumption market has further declined. The company's business, especially in Causeway Bay, although it has an invincible geographical location, famous brand, and historical heritage, it is difficult to keep up with the times. Causeway Bay has 20 floors, but according to on-site observation, the property only has cosmetics on the ground floor and branded handbags and women's clothing on the second floor that can still maintain popularity. The higher you go, the more desolate it becomes. Industry insiders estimate that the company's annual sales revenue may not even reach 70% of its peak in the past nineteen years. The toy company said that as the most valuable asset, Causeway Bay's operating performance is also facing great challenges. It is inevitable that it will face the second major drag of financial difficulties. As mentioned last week, the potential non-performing loan amount of dual-use properties in Hong Kong in recent years has reached as high as 200 billion, bringing heavy pressure to the financial system. Banks are generally not interested in lending, so the banking industry has almost completely withdrawn from the dual-use property market. Even though Causeway Bay is a prime property, its use as collateral will inevitably be directly affected by the overall market shrinkage, affecting International's financing plan. Regardless, as mentioned, the brothers themselves have strong strength and credibility. This financial crisis will eventually be overcome. As a Japanese department store in Causeway Bay, it has been established since 1985 and is still one of the important ones in Hong Kong. It still has unique characteristics. In the short term, it is unlikely to be a big problem. However, in the long term, the situation is forcing them to face the changes of the times. The company's legendary status will probably also be confined to one generation. Sign up now with this QL code for a 3-month subscription for only 1 yuan. Don't miss out, subscribe quickly!