Omniscient Investment Point - Chapter 213



Only Noblemtl

213. One more leap – 1

(1)

After breaking up with Nam Seung-ryong, I looked for Tak Jun-seok as soon as I entered the company.

“Director, we need to make some changes to the Sol Fashion Exit Plan.”

“Huh? No, why?”

I briefly explained the growth in January and February compared to the previous quarter and the newly updated operating profit margin.

Then Tak Jun-seok also sticks out his tongue.

“If we do this well, the operating profit margin will exceed 50%.”

“I think we need to look at it from a long-term perspective. Right now, investment is the top priority.”

“Oh, right. You’ll need some money to expand overseas, and you can’t ignore the cost of the judgement either.”

“Anyway, since Chairman Nam’s will is clear, I don’t think there will be any changes.”

“Where is the host?”

“I didn’t ask about that separately?”

“Should I look for it? There aren’t many places that show this level of growth, so I think any decent place would be attracted to it.”

“Well, that’s true.”

Tak Jun-seok was right.

The growth potential of Sol Fashion was so limitless that most startups couldn’t even hand out business cards.

So I nodded and left it to Tak Jun-seok, but after a while he was making strange noises.

“Sir, how about we just acquire a securities firm?”

“yes?”

“There are a lot of small and medium-sized securities companies for sale these days. We’re going to take over one of them and grow our size. I’m saying this because it seems like there are more advantages than disadvantages, so think about it.”

“Well, yes… I understand.”

It’s a small to medium-sized securities firm…

First of all, there will definitely be places that need to do IPOs in the future, so it seems worth acquiring for that alone.

Also, if the research center currently led by Kwon Ji-young collaborates with a securities firm, there will be a synergy effect… … .

‘Not bad.’

If you’re going to do it, it’s better to make a quick decision.

So I went back to see Tak Jun-seok and told him my opinion.

“I don’t know which one looks good, but yes, I think it’s worth pursuing.”

“Okay. Then, I’ll find out right away.”

“Yes, that’s right.”

But have you gotten used to my speed?

After a while, Tak Jun-seok came back in and mentioned the name of a securities firm.

“How about Madam Securities?”

“Oh, that place is for sale?”

“There are many other places besides that, but the only place to eat cheaply is Buin Securities.”

“How cheap is it?”

“I’m not lying, you can just think of it as a freebie.”

“There must be a reason it’s cheap. Is there any risk of PF default?”

“of course.”

“No, if you say that as a given… … .”

The real estate PF default problem was covered in articles every year with comments like, “This is the second IMF, this is the second financial crisis.”

As a regular, it is no exaggeration to say that it is thoroughly rotten and on the verge of exploding.

That’s understandable, as real estate businesses in the provinces have virtually come to a standstill for a long time.

These days, even businesses in the metropolitan area are not in good shape.

This part was not covered well in the media, but it means that the financial situation of construction companies is the worst.

Sales profit and loss are secondary, and even if you just look at the accounts receivable, you can be sure that there won’t be much cash on hand.

Since there is no money, there will be no way to repay the PF loan interest, and since the financial sector will not receive that money, there will be a default.

If even a few construction companies were caught in a vicious cycle and went bankrupt, small and medium-sized financial companies would have a high probability of going into the abyss.

“So, we’re not just going to take it over. We have to do a thorough due diligence and collect information.”

“Okay, please do so.”

I caught a glimpse of the confidence reflected on Tak Jun-seok’s face.

‘I’m sure you’ll do well.’

I believe in the genius of value investing.

(2)

Tak Jun-seok, who had obtained Jang Su-myeong’s permission, took action immediately.

“First, we need to find out how honest they are.”

For this purpose, information was collected.

The first thing to know is the PF size.

We have fully activated our human network.

“Hello? Manager Kim? Oh, it’s me. Oh, by the way, Manager Kim needs to help me out. Do you know Madam Securities? Do you know how much PF they have? Does anyone know? Oh, Director Jeong? Okay, I got it.”

Busy, busy. Tak Jun-seok pressed the call button on his smartphone again.

“Hello? Director Jeong? Do you have time? No, I want to buy you a drink? Hey, why would I buy you a drink? Of course I wanted to ask you something. Hey, I’ll tell you when we meet today. Where? Wow, how much are you going to charge, such an expensive place? Got it.”

And as soon as he got off work that day, Tak Jun-seok ran to Sinsa-dong.

Instead of getting a crooked nose there, I got some reliable information.

The PF size is over 500 billion, and about 20% of it is at risk of default.

The culprit(?) is said to be Su-seong ENC.

That place is currently unable to pay the principal and interest. It is practically on the verge of bankruptcy. I don’t know if other banks will extend the maturity, but that is really difficult. The place that has lent the most is Saemaeul Savings.

When he heard about the New Village Savings Fund, Tak Jun-seok also frowned.

That place, which is a minefield everywhere, is emerging as the core of PF insolvency, and is mentioned in the media whenever it is forgotten.

So, when I heard that the only hope was the Saemaul Savings Fund, I thought I should give up on acquiring my wife’s securities.

‘Let’s take a closer look.’

But I still pulled out the knife, and I felt like I was giving up too easily, so I called my wife the next day and asked for her securities.

The representative’s name was Lee Tae-soo, and he was someone I knew from walking across the bridge.

He asked Tak Jun-seok, straining his eyes, which were full of dark circles, as if he had been worried recently.

“Are you really considering an acquisition by JTS Partners?”

“Yes, that’s right.”

Tak Jun-seok did not hide his intention to take over.

However, if you approach them honestly, the other person lies or hides something.

‘I have to look elsewhere.’

So I asked outright.

“But these days, doesn’t every securities company have a PF default problem?”

“Ah, yes… … .”

“If I have to take on that bad debt, how much would it cost? That’s why I came here in person to find out.”

Hearing this question, Lee Tae-soo sighed.

“phew…….”

Still, I didn’t hide it and told Tak Jun-seok honestly.

“About a hundred billion.”

“A hundred billion?”

“Yes, that’s right. The PF size, including the bridge loan, is about 500 billion won, but there is a problem with the PF of a construction company called Susung E&C. It has reached maturity, but it has been a long time since the capital was eroded.”

“yes…….”

But it seemed like he hadn’t just been worrying all this time.

“There was an uproar over the Saemaul savings going up for auction right away, but I am trying to persuade them consistently.”

“When does it expire?”

“Next month.”

“ah…….”

That means there’s about a month left.

This also means that there is still a lot of time left until Suwon ENC is declared bankrupt.

“Is there a possibility of extending the maturity date?”

“To be honest, I think there is a greater chance that it won’t happen than that it will. That’s why I’ve set aside some reserve funds. It’s not much, but it’s around 9 billion.”

“What is the auction ranking?”

“Well, that’s hard to expect. It’s not easy for a securities company to get a high ranking.”

“but…….”

Ultimately, when a trillion won in bad debts comes back, the 9 billion won in reserve funds is the only alternative.

Tak Jun-seok, who was calculating in his head, begins to seriously ask for their opinion.

“If we take responsibility for 91 billion, can we decide to sell the wife’s securities?”

“I think we’ll have to wait and see after the meeting.”

“Yes, then, let’s discuss it. Once you’ve decided, please contact me.”

“all right.”

The reason for calling it 91 billion is that it means providing a reserve fund of 100 billion won for PF bad debts.

‘If you accept this, we can proceed right away, otherwise, we’ll look elsewhere.’

There were several other alternatives.

However, because the scale is larger, the PF default rate is bound to be larger as well.

As I was leaving the securities office with this thought, I received a call from Director Jeong, who I had been drinking with the day before.

‘what?’

Is it possible that there are defects that were discovered too late?

When I quickly received it, he took out the information I had missed again.

That’s it… … .

(3)

“I looked into it and found out that Madam Securities invested heavily in strengthening STO.”

STO stands for Token Securities, or in other words, Security Token.

I laughed as I watched Tak Jun-seok get excited about STO, which is no longer a new word.

“Is our center director becoming like me? You mentioned acquiring a securities company, then looked into a construction company, and now you’re talking about STOs again.”

“Oh, I’ll take it in a positive light. And the key is the acquisition of a securities company, and among them, I don’t think the wife’s securities are bad, so I explained the pros and cons and that’s how I got there.”

“Okay, keep talking. You were talking about the advantages, but you were cut off, and you said you strengthened STO. How did you do that specifically?”

“We are in the process of integrating blockchain technology ourselves, and have signed an MOU with an art investment company. Does that mean we will be disclosing our investment in art sculptures soon?”

“That is… … if it goes smoothly. But what if the PF default issue comes up?”

From now on, I have slyly mentioned the PF insolvency issue with the intention of hearing the shortcomings.

Then Tak Jun-seok nods and begins to explain the revealed defects.

“The total PF size including the bridge loan is 500 billion won. Among them, the Susung ENC PF is the biggest problem. While carrying out the Cheongdam-dong construction, we purchased a large piece of land. However, we don’t have enough money to even lift a shovel. So, how can we even think about paying interest on the money we borrowed?”

“How much is that?”

“The total loan amount is over 1 trillion won. But half of it is Saemaul Savings, and the remaining half is borrowed from financial companies. The wife’s securities amount to 100 billion won.”

“What is the expiration date?”

“Next month. There is zero chance of paying back the principal. The same goes for interest. You can just assume that we are on the verge of bankruptcy.”

“The auction will proceed.”

“That’s right. Even though it’s land in Cheongdam-dong, if it fails to be auctioned several times, will we be able to get even half of it?”

“The first priority will be the Saemaul Savings Fund, and there is a crisis where we won’t be able to save even a single penny?”

“Yes. The grandson reserve fund is 9 billion.”

“Will that work? This bank run is no joke, right?”

“So, we offered 91 billion as the acquisition price. We’re creating a reserve fund of 100 billion.”

What if you lose a trillion dollars and you have that much in your safe?

Investors who believe their stocks are safe will not withdraw money from their stock accounts.

“Do you want to take that?”

“I left my homework behind because I had to attend a meeting. Then I heard about STO from an acquaintance of mine.”

“hmm…….”

“If I get 91 billion, I honestly think it’s worth a try. I don’t know about anything else, but if it’s our CEO’s name, wouldn’t more individual investors be attracted?”

This guy wants to sell me out.

To be exact, they’ll probably put JTS Partners at the forefront, which isn’t a bad strategy.

Because it has built up a good image among individual investors, it is worth looking forward to.

Just then, a phone call comes in for Tak Jun-seok.

“Huh? Oh, the meeting, the decision has been made? Oh my, you’ve thought it through well. Okay, then, I’ll set a time and place and take the CEO there. Hahaha.”