Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 159 Regret (5K words, please vote with monthly tickets and recommendations, and please continue reading)

After lunch, Chen Bingwen took the opportunity to say to Li Guowei privately, "Manager Li, the factory business has gone so smoothly, thank you so much this time."

He paused for a moment, then tentatively asked, "I have another request this afternoon. Dongguan is not far from Shunde, and I would like to visit my grandparents and uncles and aunts whom I haven't seen for many years."

Is this convenient for you?

Chen Bingwen knew that everyone was exploring and moving forward at this time, and his identity as a Hong Kong businessman was both a halo and a constraint in the short term.

Sure enough, upon hearing this, Li Guowei's smile froze, and he looked extremely troubled.

He rubbed his hands together, lowered his voice, and said with great difficulty, "Mr. Chen, this... this is really difficult to handle."

He looked around to make sure no one was paying attention before leaning closer and explaining with a hint of helplessness, "Mr. Chen, although the policies have been relaxed a bit, there are still strict restrictions on the scope and area of ​​activities for Hong Kong businessmen like you."

"Processing trade" mainly takes place in designated factory areas, and the approval documents from above only allow you to conduct investment inspections in Dongguan County.

Crossing city or province boundaries, especially into rural areas, is absolutely prohibited.

"Although I am from China Resources, I am still separated from the local public security, foreign affairs, and united front departments by a layer."

Without a legitimate and reported reason, I really can't arrange for you to go to Shunde, let alone enter the village.

If we happen to encounter a checkpoint along the way, or if any commune reports it to us, not only will you be in trouble, but Dongguan County and China Resources will also have to write self-criticisms and be criticized.

This is a huge responsibility.

If you really want to go, you should apply for approval in advance, and then it should be possible next time you come.

Although Chen Bingwen was somewhat disappointed, he fully understood Li Guowei's predicament.

Every word Li Guowei said was true. In early 1979, the rules in mainland China were that strict, and it was no joke.

If you act without prior notice, especially in rural areas where vigilance is high, you could be arrested as an enemy agent, which would be a great loss.

"Manager Li, I understand. Rules are rules, and we'll follow them. You're right, we can't put you in a difficult position."

He paused for a moment, then said as a compromise, "Well then, Manager Li, could I trouble you with one more thing?"

My mother prepared some gifts, letters, and some money for the elderly.

Do you think you could find a reliable person to help me deliver this to Bijiang Village in Shunde and hand it over to my maternal grandfather, Wang Funian?

Even if I can't go in person, I should still bring the gifts and my heartfelt wishes, so that my mother can rest assured.

Upon hearing this request, Li Guowei visibly breathed a sigh of relief and immediately patted his chest to assure him, "No problem!"

Don't worry, Mr. Chen, I'll take care of this!

I have trustworthy friends in the Shunde business system; they are reliable and dependable.

I'll have him personally deliver your belongings to the elderly person, making sure he hands them over himself!

Absolutely no mistakes!

"Great! Thank you so much, Manager Li! You've really helped me a lot!"

Chen Bingwen expressed his sincere gratitude.

Although it was a bit of a shame that I couldn't go in person, ensuring that the supplies and letters were delivered safely put my mother's biggest worry at ease.

Then, he unloaded the fully packed travel bag from the car, which contained clothes, supplements, candies, and Hong Kong-made daily necessities that his mother had carefully prepared.

There was also a thick envelope containing money and a handwritten letter from his mother, as well as Shui Sheng's weighty letter home.

Li Guowei solemnly accepted the phone and immediately went to borrow a phone from a county official to contact his reliable friend in Shunde.

Watching Li Guowei's busy figure, Chen Bingwen stood at the door of the somewhat old factory office, feeling a little melancholy.

Although it is so close, I cannot go there in person.

However, he also knew that the fact that he was able to invest and set up a factory in Dongguan so smoothly was already a huge breakthrough.

Over the next two days, accompanied by Li Guowei, Chen Bingwen efficiently completed the handover of all procedures with the Dongguan County Light Industry Bureau and the soda factory.

The entire process went exceptionally smoothly, and the conditions were far more favorable than imagined.

The factory area, workshops, and equipment were provided to Chen Ji free of charge. Chen Bingwen only needed to pay a management fee of 50,000 yuan to the county light industry bureau every year.

Regarding the existing workers, both parties agreed that Chenji would use as many as possible, and if there were any left over, the Light Industry Bureau promised to arrange for them all to work in other factories in the county.

As for the more sensitive and fundamental issues such as factory ownership and land ownership, Chen Bingwen knew perfectly well and didn't ask a single question.

He knew full well that at this time, land ownership and asset nature were absolutely forbidden topics, things that a Hong Kong businessman like him could not touch or comment on.

What he can obtain is the "right to use" and the "right to operate," which is the best result that can be achieved under the current policy framework.

This approach of "doing without talking, setting aside disputes, and pragmatically advancing" was precisely the tacit understanding that existed in many things during the early stages of reform and opening up.

After spending two days together, Chen Bingwen and Li Guowei became even more familiar with each other.

After completing all the handover procedures, the two rested and drank tea in a simple office in the factory area.

Chen Bingwen picked up the rough enamel mug, took a sip of the local green tea, and said thoughtfully, "Manager Li, to be honest, I have always admired the tea culture of our China."

Tea is a wonderful thing, with a rich history, but the traditional brewing methods are indeed time-consuming and laborious, which doesn't quite fit with the pace of modern life.

Li Guowei nodded, agreeing wholeheartedly: "Yes, Mr. Chen, everyone is busy with work these days, and there really isn't much time to slowly brew and savor tea."

Even those of us who sit in offices just brew tea in large mugs all day long; we don't really care about tea ceremony or tea art.

Chen Bingwen nodded and continued, "So I've been thinking, could we develop a new type of beverage related to tea?"

It retains the health benefits and cultural heritage of tea while meeting the convenient and fashionable consumption needs of modern people.

Look, the mainland has such abundant tea resources, with each major tea-producing region possessing its own unique characteristics; this is undoubtedly its greatest advantage.

He paused for a moment, then continued, "I would like to ask Manager Li for a favor: to contact the major tea-producing areas in Fujian, Yunnan, and Zhejiang."

I plan to hire a professional film crew from Hong Kong Island to shoot some scenic footage of the tea plantations and document the processes of tea planting, harvesting, and processing.

"There are two purposes to doing this," Chen Bingwen explained. "First, to accumulate video materials for later product promotion, so that consumers can understand the source and production process of the tea, and increase their trust and goodwill towards the product."
Secondly, this filming opportunity allows us to establish direct supply and sales relationships with major tea-producing regions, ensuring the quality and stable supply of tea from the source.

Li Guowei listened intently, keenly realizing that Chen Bingwen's idea was not only commercially feasible but also perfectly aligned with the current national policy of encouraging agricultural exports to generate foreign exchange.

At that time, tea was still a Class II commodity subject to unified purchase and sales, with high-quality tea given priority for export.

Low- and mid-grade teas sold domestically are allocated by local tea companies according to a plan.

If a portion of the planned allocation were used to produce tea beverages, wouldn't that create another avenue for earning foreign exchange?

"Mr. Chen, your idea is very insightful!" Li Guowei's eyes lit up and he said excitedly, "Tea is a traditional export product, but it has always been exported as raw material and primary processed product, with low added value."

If it can be processed into a beverage, its export value will be greatly increased!

This matter is significant both publicly and privately!

After a moment's thought, he immediately declared, "Don't worry, I'll take care of this!"

I have worked in the foreign trade system for many years and have connections with foreign trade bureaus and tea companies in major tea-producing areas.

"I can help you connect with famous tea-producing regions like Tieguanyin and Wuyi Rock Tea from Anxi, Fujian; Pu'er Tea from Yunnan; and Longjing Tea from Zhejiang."

"That's great!" Chen Bingwen said happily. "With Manager Li's help, this is half the battle won! I'll arrange the film crew and equipment from Hong Kong Island. All we need to do is ask the locals to provide filming convenience and necessary introductions."

"No problem!" Li Guowei readily agreed. "Once things are settled here, I'll help you make the arrangements as soon as we get back to Hong Kong Island. We'll stay in touch!"

"Okay!" Chen Bingwen nodded with a smile, and picked up the enamel mug with satisfaction to take a sip of tea.

The reason he was so eager to develop tea beverages was that he knew clearly that competition in the beverage market was never about short-term gains or losses, but about long-term benefits.

This industry needs continuous product iteration and brand building to form a lasting competitive advantage.

Chenji has now established two main product lines: functional beverages and bottled sweet soups. In the future, it will also launch paper cup milk tea, functional chewing gum and functional energy bars.

The careful arrangement of these product portfolios is precisely to ensure that there are different profit growth points at different times, forming a product matrix for sustainable development.

Functional drinks are Chen's cash cow, bottled sugar water is to solidify the foundation, and tea drinks are a strategic move he has made for the future.

Whether it's Suntory Oolong Tea, which was launched in 1981 and subsequently became a hit in Japan, or Sunrise Iced Tea, which later achieved annual sales of 30 billion yuan in China, they all prove one fact: the tea beverage market has huge potential, but it is essential to seize the initiative and occupy brand mindshare.

In a while, Suntory will send its film crew to explore the tea-producing areas of Fujian.

Capture the misty tea mountains, the skilled tea masters, and the profound tea culture.

Using these carefully edited video materials, they created a brand image of "authentic Chinese oolong tea" in the Japanese market.

It was precisely this brand image—packaging oolong tea as a mysterious beverage from China—that enabled Suntory to achieve great success in the Japanese market. Even later, when selling in mainland China, it continued to wear the "Made in China" label, leading many consumers to mistakenly believe it was a local brand.

It was only 1979, and he had plenty of time to seize the initiative and be the first to launch China's own oolong tea beverage, which could then be exported to Japan.

Take advantage of Japan's rapid economic growth and increased consumer spending in the coming years to make a quick buck.

More importantly, by leveraging the advantages of the "processing trade" policy, Chen Ji can establish tea supply bases in mainland China, directly carry out deep processing, produce bottled tea beverages, and then export them to overseas markets such as Japan.

The next day, Chen Bingwen left Gao Zhenhai and the two technicians at the Dongguan soda factory, and returned to Hong Kong Island with Zhao Gang and Li Guowei.

Although I didn't get to see my grandparents and other relatives during this trip back to the mainland, the successful takeover of the Dongguan soft drink factory laid a solid foundation for Chen's production layout, which was already a huge achievement.

The journey back to Hong Kong was much smoother than the journey there.

In the car, Li Guowei was still very excited about the idea of ​​tea drinks, and discussed the follow-up plans in detail with Chen Bingwen.

"Mr. Chen, don't worry, as soon as I return to China Resources, I will formally report this project to the leadership."

Li Guowei was full of confidence: "I have dealt with the foreign trade bureaus and tea companies in Anxi and Wuyishan in Fujian, Pu'er tea region in Yunnan, and Longjing tea region in Zhejiang."

If we contact them on behalf of China Resources and invite them to cooperate in filming and discuss collaboration, they will definitely take it seriously.

Chen Bingwen laughed and said, "With the prestigious name of China Resources paving the way, things will be much easier."

After I returned, I had a professional filming team assembled, a tea culture consultant hired, and equipment prepared.

Once you've made all the necessary arrangements, the film crew can depart at any time.

"Okay! Let's work on both fronts and get this done as quickly as possible!" Li Guowei nodded vigorously.

Upon arrival on Hong Kong Island, the two sides parted ways at the Lo Wu border crossing.

Li Guowei was in a hurry to return to the company to report, and Chen Bingwen also took Zhao Gang straight back to Weiye Building.

As soon as he arrived at his office, Vincent Fang, who had been notified of his return, knocked on the door and came in.

"Mr. Chen, you must be tired from your journey!" Fang Wenshan said as he poured tea for Chen Bingwen.

"Fortunately, the factory takeover went very smoothly. A few simple modifications and it'll be ready for production," Chen Bingwen explained briefly before asking, "How's things going on your end?"

"After you went to the mainland, I immediately contacted Huoduoli, and the result was completely unexpected!"

Fang Wenshan became somewhat agitated upon hearing Chen Bingwen's question.

Chen Bingwen took the teacup, gesturing for him to sit down and explain in detail: "Tell me slowly, what exactly happened?"

Fang Wenshan sat down opposite him and said with a smile, "I approached Zheng Jinhua, the vice president of the finance department of Huoduoli Enterprise, under the guise of consulting on the listing process."

He took it very seriously after reviewing our financial statement summary, market distribution, and growth data for the past year.

That afternoon, they arranged a more in-depth meeting with me.

"Oh? What do they think?" Chen Bingwen asked.

"They had a very high opinion of our profitability and growth momentum!"

Fang Wenshan affirmed, "Zheng Jinhua stated frankly that Chen Ji's current profit level and market expansion speed fully meet or even far exceed their screening criteria for potential listed companies."

He made it clear that Huoduoli is very interested in serving as our financial advisor and sponsor for our future IPO.

Especially in the area of ​​backdoor listings, they have extensive experience and a proven track record, making them arguably the top brand in the Hong Kong market.

"What about acquiring Watsons?"

With HSBC as its backing, Huoduoli wields significant influence in Hong Kong's financial sector, and it's almost a given that it has suitable shell companies in its hands.

In comparison, Chen Bingwen was more concerned with acquiring Watsons.

Fang Wenshan laughed and said, "Zheng Jinhua said that Hutchison Whampoa has indeed been adjusting its non-core asset portfolio recently in order to focus on its main business and optimize its financial statements."

He stated that if they were entrusted to act as intermediaries to facilitate the acquisition of Watsons, the chances of success would be very high.

Chen Bingwen slowly leaned back in his chair, a knowing smile appearing on his lips.

Things went even more smoothly than he had expected.

The directness of the profits precisely proves the value and feasibility of this deal.

They saw not only the commission, but also the overall benefits that could be gained from operating such a landmark transaction.

“They don’t shy away from it at all,” Chen Bingwen chuckled.

Fang Wenshan nodded. "Zheng Jinhua means that if Chen Ji really has this intention, Huoduoli is willing to provide full assistance."

We provide a one-stop service, from facilitating transactions, designing plans, and arranging financing to subsequent backdoor listings and asset injections.

He even hinted that, if needed, Huoduoli could provide some bridging financing support, provided that our acquisition plan and repayment sources are robust enough.

"They've gone to so much trouble, they can't be helping for nothing. What are their conditions?"

Chen Bingwen knew that what's free is often the most expensive!

Huo Duoli must have something in mind for putting in so much effort.

“They want to invest!” Fang Wenshan said.

Chen Bingwen frowned slightly. "How exactly?"

Fang Wenshan explained, "Zheng Jinhua means that Huoduoli is very optimistic about Chenji's future development."

We hope to participate deeply in and share in Chenji's future growth dividends as a strategic investor.

They proposed a two-step plan.

The first step in the acquisition of Watsons was that Howard Johnson could coordinate with HSBC to provide a portion of preferred stock financing at a preferential interest rate, but on the condition that he obtain an option to convert it into ordinary shares of Chan Kee at a future date based on an agreed valuation.

The second step, during our subsequent backdoor listing process, involved Huoduoli, as the sponsor and underwriter, hoping to obtain a certain percentage of 'strategic placement' shares and join the board of directors to participate in major decisions, but promising not to interfere in day-to-day operations.

Upon hearing Huo Duoli's terms, Chen Bingwen leaned back in his chair and fell into deep thought.

Hortoll's ambitions were greater than he had anticipated.

They not only want to earn immediate commissions, but also want to seize Chenji as a future cash cow and share in long-term capital appreciation.

This is undoubtedly a double-edged sword.

The benefits are obvious:
Gaining a deep connection with the HSBC group means stronger financial support, higher credit endorsement, and smoother capital operation channels.

In the future, whether it's large-scale mergers and acquisitions, overseas expansion, or other capital operations, they will be even more powerful.

However, risks also exist:

With equity diluted and decision-making power constrained, the company's strategy and development pace may be influenced by its investors.

The goal of maximizing financial returns is often not entirely aligned with an entrepreneur's long-term strategic vision.

For a company to be listed on Hong Kong Island, the public offering of shares must be at least 25% of the total share capital.

If we also take into account the 10% option pool reserved for senior executives.

Chen Bingwen himself only had 65% left.

Thinking of this, Chen Bingwen looked at Fang Wenshan and asked, "What do you think?"

Fang Wenshan had clearly given it a lot of thought: "Mr. Chen, the advantages and disadvantages are both very obvious."

The advantage is that with HSBC as our backer, our future path will be much easier, and many of our current thorny problems will be easily solved.

The risk is that we might lose some of our autonomy.

He then changed the subject: "But I believe that at this stage, the advantages outweigh the disadvantages."

We are in a period of rapid expansion and urgently need strong support from capital and resources.

The 'preferred stock + option' model proposed by Huodoli will not dilute our equity immediately in the initial stage, giving us a buffer period.

Moreover, their deep involvement would greatly increase the success rate of acquiring Watsons and achieving a backdoor listing.

Chen Bingwen nodded slowly; Fang Wenshan's analysis coincided with his own thoughts.

Now is not the time to hold onto equity, but a critical moment to use equity to gain room for growth and speed.

(End of this chapter)