Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 181 Feint to the East, Attack in the West (Seeking monthly votes, recommendations, and subscriptions!)
Back in his office on the top floor of the Weiye Building, Chen Bingwen once again spread out the information on Yingni in Qingzhou.

My gaze fell on the equity structure section.

The meeting with Li Ka-shing was outwardly polite, but in reality, it laid the groundwork for their future.

Next, it will be a real, hard-fought battle.

He stared at the equity structure diagram, his mind racing.

Currently, Li Ka-shing's Cheung Kong Holdings holds 25% of the shares, his own Sugar Heart Capital holds 20%, and the remaining 55% is distributed among the market and small and medium-sized shareholders.

According to the rules of the game, important resolutions of listed companies, such as issuing new shares, mergers, amendments to the articles of association, or even liquidation, require the approval of more than 75% of the shareholders present to pass.

This means that if he can firmly hold more than 25% of the shares, he will have a veto right.

At that time, even if Li Ka-shing is the largest shareholder, no major decision that could harm his interests can be made without his approval, such as diluting his shareholding by issuing new shares.

This 25% is his lifeline and his most important bargaining chip in this game.

In other words, he must now acquire at least another 5.01% of Qingzhou Yingni's shares.

But how do I get it?
In the secondary market, Li Ka-shing has abundant funds, so if he were to bid up shares head-on, his chances of winning would be slim.

Moreover, large-scale acquisitions will inevitably drive up stock prices and cause costs to rise sharply.

We must use a smarter approach.

If they cannot engage in close combat with Li Jiacheng on Yingni in Qingzhou, they must open up a second battlefield.

By using the second front, they could gain a strategic advantage through a strategy of "openly repairing the plank road while secretly crossing the Chencang pass."

Only in this way can we achieve ultimate strategic victory.

Currently, Cheung Kong Holdings, or rather Li Ka-shing's weakness, is Hutchison Whampoa, which he is about to acquire from HSBC.

Chen Bingwen wrote the four characters "Hutchison Whampoa" in his notebook and then put a big X on it.

Li Ka-shing's Achilles' heel lies here.

The acquisition of Hutchison Whampoa requires a huge amount of capital, which will inevitably strain Cheung Kong Holdings' cash flow at this time.

Otherwise, they wouldn't have sought a loan from HSBC.

If we create trouble for Li Ka-shing at this crucial juncture, making him unable to attend to both ends, we can gain the upper hand in the negotiations in Yingni, Qingzhou.

Thinking of this, he asked his secretary, Ali, to invite Vincent Fang over.

Fang Wenshan arrived at the office quickly.

"Chen Sheng, you were looking for me?"

Chen Bingwen gestured for him to sit down and got straight to the point: "Director Fang, our cash reserves are getting more and more abundant, and we can't just keep them sitting in the accounts."

I plan to establish an investment department directly under the group, specifically responsible for stocks, futures and other financial investments, to keep the money moving.

You're in charge of assembling the team. Bring over the core team members who handled the Golden Elephant Foods acquisition in Thailand, and also find some reliable new talent.

Chen Bingwen's requirements are very much in line with the company's needs for standardized management and asset allocation.

It's a waste to have so much money sitting in the account for so long without generating any extra income, especially given this great investment opportunity.

Fang Wenshan nodded and said with emotion, "I understand. We do need a professional team to manage this area."

Including syndicated loans, the company currently has over 200 million yuan in cash reserves, which definitely requires professional management.

Chen Bingwen nodded and continued, "There are two tasks at the moment, with different priorities and different operating methods."

The first task is to be public, and even to make a lot of noise.

Use a portion of the funds to acquire scattered shares of Qingzhou Yingni in the secondary market.

We will acquire at least another 5.01% of the shares, on top of our existing 20% ​​stake.

We need to project an image of determination and a commitment to gaining controlling interest; we can make a slightly bigger splash to draw the attention of the market and the Li family to our aggressive acquisition of shares.

Fang Wenshan frowned slightly and questioned, "Mr. Chen, wouldn't it be too costly to compete with Li Jiacheng head-on like this?"
And it can easily trigger a rapid rise in stock price.

"So we need to control the pace and grasp the right degree," Chen Bingwen explained with a smile. "Our real goal is only 5.01%, and obtaining the veto power will achieve our strategic objective."

The reason for making a show of fighting for it with all their might was to attract Li Jiacheng's attention and cover up another operation.

Once you've secured 5.01%, the remaining strategy can be to buy low and sell high, maintaining market momentum while profiting from the price difference.

"Understood, a bluff to strike at the heart of the matter."

Fang Wenshan quickly grasped the situation and understood that Chen Bingwen was trying to use a diversionary tactic. "Then who is the real target?"

Chen Bingwen's expression became more serious: "The real goal, that is, the second task."

It must be kept absolutely confidential.

Find someone you can completely trust, and quietly acquire Hutchison Whampoa's circulating shares using offshore accounts and different brokerage channels.

The actions must be discreet, with orders placed in a dispersed manner to avoid attracting any market attention.

There's no limit to the amount of capital; you can absorb as much as you have, but the average price must be carefully controlled.

Fang Wenshan was truly stunned this time; he couldn't follow this logic at all: "Acquiring Hutchison Whampoa?"
Mr. Chen, this has absolutely nothing to do with our main business, and it's such a large and complex operation, it's unacceptable to us.

"I can't explain the reason right now," Chen Bingwen interrupted him, saying firmly, "You just need to know that this is crucial to our future strategy."

Just do as I say, I'll guarantee the funding.

Remember, this is something only you and I know. The operations team should just execute the plan and not ask why.

Looking into Chen Bingwen's determined eyes, Fang Wenshan knew that this was not a discussion, but an order.

Although he was full of doubts, he nodded in agreement based on his trust in Chen Bingwen's past judgment: "Understood. I will arrange the most reliable people to carry out the operation secretly through different channels to ensure absolute confidentiality."

“Very good.” Chen Bingwen nodded. “Establish the investment department as soon as possible, and launch the two tasks simultaneously.”

In Qingzhou Yingni, we can be a little more high-profile.

On the Hutchison Whampoa side, it needs to be as silent and subtle as water seeping into sand. But the latest it can be is September; I need to acquire at least 6-10% of Hutchison Whampoa's shares before September.”

"I'll take care of it right away." Fang Wenshan stood up and left in a hurry.

He felt a heavy burden on his shoulders, especially since he knew nothing about the reasons for the acquisition of Hutchison Whampoa, but this made him realize that this matter was of utmost importance.

A few days later, the "Investment Department" was officially established, located on another floor of the Weiye Building, and equipped with a dedicated telephone line and quotation system.

Fang Wenshan transferred the first sum of money from the group's finance department.

Operations were initiated first in Yingni, Qingzhou.

Several accounts began selectively absorbing sell orders in the market, sometimes even deliberately pushing up prices by a few cents with small orders to attract market attention.

Soon, rumors began circulating in the market that newly rich businessman Chen Bingwen was vying with Li Jiacheng for control of Qingzhou Yingni.

The stock price of Qingzhou Yingni began to rise moderately, and the trading volume also increased.

Meanwhile, another completely independent group, through several offshore company accounts registered in the British Virgin Islands, began to buy Hutchison Whampoa shares in an extremely patient and diversified manner through different securities brokerage firms.

Each order was small, and the order times were staggered as much as possible, perfectly hidden in the huge daily transaction volume without causing a ripple.

At the headquarters of Cheung Kong Holdings, Li Ka-shing naturally noticed the unusual stock price fluctuations and market rumors surrounding Qingzhou Yingni.

Secretary Hong Xiaolian placed the briefing on his desk and reported, "Boss, there are rumors in the market that Mr. Chen Bingwen is continuously buying Qingzhou Yingni, seemingly trying to seize control."

Looking at the stock price chart of Qingzhou Yingni, Li Ka-shing sneered, "It's good that young people are energetic, but they also need to know their limits."

He said to Hong Xiaolian, "Since he likes Qingzhou Yingni so much, let's help him raise the stock price."

Sure enough, the stock price of Qingzhou Yingni showed unusual activity as soon as the market opened the next day.

Several large buy orders suddenly appeared, pushing the stock price up by 5%.

Sensing something was wrong, Fang Wenshan immediately reported to Chen Bingwen: "Mr. Chen, there are unidentified funds in the market driving up the share price of Qingzhou Yingni. Could it be that Cheung Kong Holdings has intervened?"

Looking at the intraday trading volume data of Qingzhou Yingni, Chen Bingwen smiled slightly: "They really couldn't hold back. Proceed as planned. We'll reduce our holdings appropriately when they push the price up, and then buy them back after it falls back."

In the following trading days, Qingzhou Yingni's stock price was like a roller coaster ride.

Cheung Kong Holdings' funds were used to drive up the share price from time to time in an attempt to increase Chen Bingwen's acquisition costs.

However, Chen Bingwen's traders always managed to reduce their holdings appropriately at high points and quietly buy back at low points, not only increasing their shareholding ratio but also earning considerable profits through swing trading.

After the market closed that day, Fang Wenshan came to Chen Bingwen with the transaction records: "Mr. Chen, our shareholding in Qingzhou Yingni has reached 22.03%."

Moreover, by buying low and selling high, they netted over three million yuan.

"How's the progress with Hutchison Whampoa?"

Compared to Qingzhou Yingni, Chen Bingwen was more concerned about Hehuang, since Hehuang was the key battleground that would determine the outcome.

"We've already acquired 2.7% of Hutchison Whampoa's shares, completely unnoticed by the market," Vincent Fang reported in a low voice. "However, we're probably running out of funds."

We previously had HK$220 million in cash on hand.

To maintain a 25% shareholding threshold, Qingzhou Yingni needs to reserve at least ten million yuan as a margin.

Hutchison Whampoa has already invested HK$60 million, and currently has HK$160 million in available funds.

To acquire a 20% stake, at least HK$2.5 million would be needed.

Upon hearing Fang Wenshan's report, Chen Bingwen sighed helplessly. Hutchison Whampoa Group truly lived up to its reputation as one of the four major British-owned investment banks.

Even with years of losses, acquiring control of such assets still requires a considerable price.

Acquiring 10% of Hutchison Whampoa shares on the secondary market would require at least HK$2-3 million, which Chan Kee could barely manage on his own.

However, the safest approach would be to obtain the same 25% veto power, thus preventing the major shareholder from issuing new shares and diluting the share capital.

As for the problem of insufficient funds, Chen Bingwen had already devised a solution when he decided to acquire Hutchison Whampoa shares.

So, as soon as Vincent Fang finished speaking, he replied:

“I’ll figure out the funding problem. You just have the traders continue to acquire Hutchison Whampoa shares according to plan.”

Fang Wenshan nodded in agreement, saying, "Understood, I will have the trader control the pace."

"Director Fang, tonight at the Ocean Palace nightclub, I'm inviting all the traders from the investment department to relax!"

Before Fang Wenshan left, Chen Bingwen called him back.

When Fang Wenshan heard that Chen Bingwen wanted to treat everyone, he was taken aback for a moment, then laughed and said, "Mr. Chen, we're just doing our duty, there's no need to go to such lengths, is there?"

Chen Bingwen waved his hand: "Yes, I will."

Everyone has been working overtime and under a lot of pressure lately. Now that we've achieved our first-stage goal and even made some extra money, it's time to relax.

Tell the guys, I'm paying for everything tonight, so everyone can have a great time.

Chen Bingwen did this mainly for two reasons.

The first level involves immense pressure and high levels of mental stress from operating in the financial markets.

Having just achieved a minor victory and earned a considerable profit in the initial clash with Li Ka-shing, timely celebration and reward can greatly boost team morale, allowing traders to feel that their efforts are directly recognized, which is beneficial for more challenging operations in the future.

The second is to solidify loyalty.

The work of the investment department, especially the secret acquisition of Hutchison Whampoa shares, must be kept absolutely confidential.

Generous material rewards can strengthen the core team's sense of belonging and awareness of confidentiality.

Fang Wenshan was a smart man, and after a little thought he understood the trick, so he stopped refusing: "I'll go and inform everyone right away, they'll be overjoyed."

"Okay, go ahead. Book the biggest private room and find plenty of pretty hostesses."

Chen Bingwen added with a smile, "You should relax too, you've been working hard lately."

(End of this chapter)