Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 188 Clash (Seeking monthly votes, recommendations, and subscriptions!)
The Hong Kong stock market opened at 9:30 a.m.

Chen Bingwen arrived at the investment department office.

The room was filled with the sounds of telephones ringing and quotes being made.

On the blackboard, traders quickly recorded stock price fluctuations with chalk.

At this time, Hong Kong stocks used a manual matching model with bids placed one by one.

After the market opens, the investment department's traders contact the traders at the stock exchange by phone, and then the traders verbally place orders in the trading hall, and the transactions are executed one by one.

It wasn't until the electronic system went online in the 1990s that the call auction model was gradually adopted.

Therefore, under the current trading model, there is no situation where the stock price gaps up at the open.

The opening price of Qingzhou Yingni was the same as the price on Saturday when the market was closed, at HK$2.95 per share.

At the start of the trading day, trading volume was relatively sparse, with only a few scattered small orders.

Chen Bingwen stood quietly at the back, looking at the numbers on the blackboard.

Fang Wenshan stood beside him and whispered, "Mr. Chen, I've already notified Citibank to start by accumulating small amounts of shares, and then make a big push once the market becomes more active."

"Yes." Chen Bingwen nodded.

A few minutes later, several buy orders for thousands of shares suddenly appeared on the price chart of Qingzhou Yingni, quickly pushing the price up to HK$3.02, a jump of nearly 3% in an instant.

"It's starting," Fang Wenshan said in a low voice.

Chen Bingwen knew that this meant the Citibank team had begun to make moves.

The market has a keen sense of smell, especially for stocks like Qingzhou Yingni, which have recently attracted much attention due to the battle for control of the company.

The unusual stock price movement quickly attracted attention from all sides.

More buying pressure emerged, and the stock price rose steadily, like a lit fuse.

3.05
3.08
3.12
Trading volume surged dramatically.

Many retail investors and speculators who followed the trend saw the surge in trading volume and bought in.

By 10:00 AM, Qingzhou Yingni's stock price had risen by more than 8%, stabilizing above HK$3.2, and its trading volume ranked among the top, making it the focus of the market.

……

Cheung Kong Holdings, Chairman's Office.

Li Jiacheng sat behind a large desk, reviewing a document.

Secretary Hong Xiaolian knocked softly on the door and entered, her face showing some nervousness.

"Mr. Li, there's been some unusual activity in Qingzhou Yingni's stock price. It's risen by more than 8% in half an hour and is now around 3.2 yuan, with a significant increase in trading volume."

Hong Xiaolian quickly gave the report.

Li Jiacheng raised his head, his brows furrowing almost imperceptibly.

He put down the file and asked, "Do you know why? Has any news leaked out?"

"We haven't heard any good news about Yingni in Qingzhou yet."

It looks like someone is buying in bulk.

Hong Xiaolian answered.

After a moment's thought, Li Jiacheng decided, "Investigate two things immediately. First, find out the source of these purchases and which brokerage firms are behind them."

Secondly, we need to have our people stabilize the stock price in the market, preventing our competitors from driving it up so easily.

"Yes, Mr. Li!" The secretary immediately accepted the order and left.

Li Jiacheng sat back in his chair, tapping his fingers lightly on the table.

He was determined to acquire the Qingzhou Yingni project, not only because of the cement business, but more importantly because of the land in Hung Hom Hok Yuen Street, which was a crucial part of Cheung Kong's development in the coming years.

He had already reached an agreement with all parties on the board of directors of Qingzhou Yingni and was about to issue an announcement.

Qingzhou Yingni said that it is jointly developing that land with Cheung Kong Holdings.

At that time, Cheung Kong will be able to make a substantial profit from this land.

Unexpectedly, a dark horse emerged from the middle, and Sugar Heart Capital acquired 20% of the shares from the Kane family, instantly becoming the second largest shareholder and disrupting his plans.

Now, if we were to hand over the land in Hung Hom to Cheung Kong Holdings for development as before, the difficulty would likely increase exponentially if we didn't win over Chan Ping-man and obtain his consent.

However, when Li Jiacheng thought about Chen Bingwen's smiling yet unusually persistent expression when they met that day, he felt a headache coming on.

The instructions from Li Ka-shing were quickly relayed to the securities investment department of Cheung Kong Holdings.

The head of the investment department immediately sprang into action, arranging for staff to urgently investigate the source of the buying orders while instructing traders:

"Get on stage immediately!"
Buy up as many sell orders as there are below 3.2 yuan!
"Keep the price stable; don't let him push it up so easily!"

Cheung Kong's funds began to enter the market and take over.

In the market, both buying and selling orders for Qingzhou Yingni surged simultaneously, with the stock price fiercely contested around 3.2 yuan, resulting in a sharp increase in trading volume.

Fang Wenshan, who had been closely monitoring the market, quickly noticed it.

"Mr. Chen, a rival has emerged."

The buying was very aggressive, with buyers vying for shares around 3.2 yuan.

It looks like someone from Cheung Kong Holdings has entered.

Chen Bingwen's eyes narrowed slightly.

Li Jiacheng's reaction was faster and more direct than he had expected.

It seems he is determined to acquire Qingzhou Yingni and does not want to see the stock price spiral out of control.

“They want to stabilize prices and drain our funds,” Chen Bingwen calmly assessed. “Don’t try to compete with them on price.”

Tell the Citi team and our people to adjust the strategy.

They grab the chips at low prices, so we push the price up to create space for price movement.

"Buy more at 3.25 and 3.3 yuan!"

He wanted to make Li Jiacheng understand that it was impossible to accumulate shares at a low price.

They either have to withdraw from the competition, or they must compete with him in terms of financial strength at a high level.

"Understood!" Fang Wenshan immediately relayed the instructions to the trading team.

The buying strategy has been adjusted; it is no longer limited to the area around 3.2 yuan, but is now aimed at upward movement.

Buy orders continued to pour in on March 3.22, 3.25, and 3.28, driving the stock price higher.

On the other side, the head of investment at Cheung Kong Holdings was sweating as he watched the stock price climb steadily.

Following means investing more funds, which significantly increases costs.

If you don't follow suit, the stock price may skyrocket and get out of control.

"Follow their lead! But don't be like them, disregarding costs."

"Buy in batches between 3.25 and 3.3, and control the pace!" the supervisor ordered through gritted teeth.

The boss's order was to stabilize the stock price, and he had to carry it out.

The bulls and bears engaged in a tug-of-war in the 3.25 to 3.3 yuan range.

The stock price fluctuated up and down like a seesaw, and the trading volume continued to increase, becoming the focus of attention of the entire market.

By 11:00 AM, Qingzhou Yingni's stock price had stabilized at 3.3 yuan, an increase of more than 11% from the opening price, with an extremely high turnover rate.

Chairman's Office of Cheung Kong Holdings.

Hong Xiaolian knocked on the door again and came in, her face somewhat grave: "Mr. Li, we've found out part of the source of the purchases."

The influx of funds was primarily concentrated through Citibank and several foreign brokerage firms.

It appears to be the same large amount of money being used.

Citibank.

Li Jiacheng frowned slightly, unable to figure out why Citibank's trading account would suddenly be acquiring a large number of shares in Qingzhou Yingni. "How's the situation on our side? How much have we bought?"

Li Jiacheng asked.

"We have already used nearly 20 million yuan to take over the shares, but the shareholding ratio has not increased much because the share price is high, and the same amount of money can buy fewer shares."

The other party seems to have ample funds and is continuing to buy.

Hong Xiaolian reported.

Li Jiacheng pondered for a moment.

Fighting head-on in the secondary market like this is too costly and not a viable solution.

“Have our people slow down their buying pace for now,” Li Jiacheng said after a moment’s thought. “Also, immediately contact several funds and securities firms with which we have close ties and ask them if they have any stock of Qingzhou Yingni.”

Directly buying shares in the secondary market is too costly, so he plans to acquire more shares at a lower price through negotiated transfers from institutions or by borrowing securities, in preparation for unforeseen circumstances.

"Yes, Mr. Li!" Hong Xiaolian accepted the order and left.

Cheung Kong Holdings' slowdown in its buying pace was quickly noticed by Chen's Investment Department.

"Mr. Chen, the opposing side seems to be less aggressive; they're not as desperately buying shares as they were before."

Chen Bingwen checked the time, then looked at the stock price and trading volume.

"They may have changed their strategy."

He pondered for a moment and said to Vincent Fang, "Don't relax, keep the pressure on."

However, the pace can be controlled a bit, and there's no need to just keep attacking relentlessly.

Our goal is to acquire a controlling stake in Qingzhou Yingni, not to indefinitely drive up the stock price.

The stock price is too high, and the cost of a full acquisition in the future would be staggering; he needs to strike a good balance.

At the close of trading this morning, Qingzhou Yingni closed at 3.32 yuan, a 12.5% ​​increase in half a day, with huge trading volume that shook the entire market.

The battle reignited after the market opened in the afternoon.

Cheung Kong's direct sweeping activity has decreased, but there are always buy orders to support the stock price when it falls, indicating that it has not withdrawn from the competition, but has just become more flexible in its strategy.

Meanwhile, market rumors suggest that some institutions have begun inquiring about Qingzhou Yingni's shares, indicating a possible large-scale negotiated transfer.

Chen Bingwen, on the other hand, continued to accumulate shares in an orderly manner according to plan, keeping the stock price at a high level above 3.3 yuan.

Before the market closed in the afternoon,

Chen Bingwen looked at the numbers on the blackboard. Qingzhou Yingni's stock price had been pushed up to 3.68 yuan, an increase of more than 24%.

Fang Wenshan walked over with the newly compiled data and reported in a low voice: "Mr. Chen, we have acquired approximately 11.6% of the shares today. Combined with the previous 20%, we now hold a total of 31.6% of Qingzhou Yingni's shares."

The cost exceeded thirty million.

Chen Bingwen nodded; the result was even better than he had expected.

The rapid rise in stock price clearly disrupted Li Ka-shing's plans. Although Cheung Kong tried its best to support the stock price, it was obviously a step behind in mobilizing funds.

Raising and investing tens of millions of dollars in cash in a single day is no easy feat for any business.

“Very good,” Chen Bingwen said. “At tomorrow’s shareholders’ meeting, we will hold more than 30% of the shares, and our words will carry a completely different weight.”

He knew that in 1979, Hong Kong stocks did not have a mandatory takeover offer system, and holding more than 30% of shares did not automatically trigger an obligation to acquire all shareholders.

But this was enough to make him a significant shareholder with a strong voice and veto power.

Chairman's Office of Cheung Kong Holdings.

Hong Xiaolian reported to Li Jiacheng: "Mr. Li, today in order to stabilize the stock price, we invested a total of more than 28 million yuan and acquired about 3.2% of the shares."

Our total shareholding has increased to 29.5%.

However, Qingzhou Yingni's market value has surged from 1.2 million to nearly 2.6 million.

Li Jiacheng remained calm and said nothing.

He underestimated his opponent's determination and financial strength.

To boost a stock price by more than 24% in a single day requires substantial capital and decisive execution.

His original plan was to gradually acquire the company and control costs, but now everything has been disrupted.

"Has the matter been thoroughly investigated?"

Is Chen Ji Foods the company behind Citibank?

Li Jiacheng asked.

"It's basically confirmed," Hong Xiaolian replied. "We've learned through various channels that Chen's Group has secured at least HK$300 million in syndicated loans from Citibank, Morgan Stanley, and Goldman Sachs."

Upon hearing this number, Li Jiacheng fell silent.

A syndicated loan of HK$300 million. This figure far exceeded his expectations.

He never expected that Chen Bingwen would be able to leverage such a large amount of funds.

“Three hundred million,” Li Jiacheng murmured. “It seems this Mr. Chen has something big on his mind.”

"The shareholders' meeting is tomorrow," Li Jiacheng said thoughtfully.
"It seems things won't be too peaceful."

Inform our board of directors to prepare.

“Mr. Li,” Hong Xiaolian reminded him, “the finance department reported that we need to withdraw an equivalent amount of funds from our working capital in the short term, which will put a lot of pressure on us.”

Construction and land payments for several real estate projects also need to be made on schedule.

Li Jiacheng was certainly aware of his family's situation.

Although Cheung Kong Holdings has substantial assets, most of its funds are tied up in land and projects, and its cash reserves are not unlimited.

Nearly 30 million in cash was spent in a single day, and this was for a defensive equity acquisition rather than an active investment, which has already crossed the safety line for short-term cash mobilization.

"Have our people temporarily halt their large-scale buying spree in the secondary market," Li Jiacheng decisively ordered. "We can't keep following his lead."

He raised the price, and we followed suit, which was exactly what he wanted.

Our cash runs out faster than his.

"But Mr. Li, if we don't follow suit, the stock price might..."

“Let him raise it.” A cold glint flashed in Li Jiacheng’s eyes. “The higher the stock price rises, the greater the cost of his full acquisition will be, and the stronger the willingness of other minority shareholders to hold cash and wait and see will be.”

What we need to do now is not to compete with him on who has more money, but on who can afford to wait longer and who can find cheaper money and leverage.

He paused, then continued, "Two things."

First, continue to strengthen contact with the funds and institutions that hold shares in Qingzhou Yingni. We're not buying from them, we're borrowing!
We'll temporarily borrow their shares through a pledge, giving us voting rights in return.

"Secondly, we will contact HSBC and apply for a short-term bridge loan of at least HK$50 million, using some of our high-quality assets as collateral."

Hurry!

Li Jiacheng's thinking is very clear.

If a direct confrontation with cash becomes too costly, then switch battlefields.

Acquire voting rights at low cost through "share lending" to consolidate control;

At the same time, they used assets as collateral to obtain cheaper and larger amounts of funds from banks, preparing for future funding.

"I understand, Mr. Li! I'll get on it right away!"

After Hong Xiaolian left, Li Jiacheng sat alone in his office, gazing at the sky outside the window in a daze.

Chen Bingwen's move was indeed brilliant—fast, accurate, and ruthless—catching him completely off guard.

But the trials and tribulations that enabled Li Ka-shing to rise to prominence in Hong Kong's real estate industry went far beyond this.

"It's a good thing for young people to have drive."

He muttered to himself, "But the business world isn't just about who shoots first; it's also about who sees further and who can endure more."

(End of this chapter)