Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 193 Announcement (Seeking monthly votes, recommendations, and subscriptions!)
A week later, on Monday morning, Chen Bingwen had just finished processing a few documents in his office on the top floor of the Weiye Building when his secretary, Ali, received a ring on the internal phone.

"Mr. Chen, Manager Li Weiming is here. He said the advertising samples from North America have been delivered and he'd like to know when it would be convenient for you to view them."

"Let him in. Also, please have Director Ling and Director Fang come over as well," Chen Bingwen instructed.

A few minutes later, Li Weiming, Ling Peiyi, and Fang Wenshan entered the small conference room next to the office one after another.

The projection equipment has been prepared in the conference room.

"Mr. Chen, Director Ling, Director Fang."

Li Weiming greeted them and quickly put a videotape into the player. "This is an advertisement sample that the team over there rushed to finish, along with some promotional photos of Prince and a music video of his new song, which will be used as the background music for the advertisement."

The television screen began playing a sample advertisement.

The entire advertisement features a modern color palette and a fast-paced editing style.

The prince himself, dressed in his signature purple outfit, sang and danced on a futuristic stage, with the camera frequently switching to close-ups: he picked up a can of "Pulse" energy drink and drank it down, then displayed his abundant energy.

The core of the advertisement's concept is "releasing energy and breaking conventions." Although the image quality is not ultra-high definition due to the limitations of the shooting equipment and television resolution at the time, the overall atmosphere and brand tone are captured very accurately.

Chen Bingwen watched intently.

This advertising idea was provided to the team by him after combining and modifying several classic cases from his past life memories. Although the production conditions were limited, the core elements of "fashion", "vitality" and "energy" were all expressed, which is definitely novel in this era.

In retrospect, the execution was carried out fairly well.

After the film ended, Li Weiming looked at Chen Bingwen with a mixture of anticipation and nervousness: "Mr. Chen, what did you think?"

"Hmm, not bad." Chen Bingwen nodded. "It basically met expectations."

The prince's expressiveness and the music are both captivating, and the advertisement is memorable enough.

Release this version and let them complete the final editing and post-production as soon as possible.

Besides TV commercials, are radio commercials and posters also following this style?

“Yes, Mr. Chen,” Li Weiming confirmed. “The entire style is consistent, emphasizing the concept of ‘releasing energy’.”

"Okay." Chen Bingwen turned to Ling Peiyi, "Director Ling, how are the distribution and promotional preparations going in North America?"

Ling Peiyi immediately opened the folder she had brought with her and reported, "Mr. Chen, everything is ready as planned."

The first batch of goods from major cities on the East and West coasts, including New York, Los Angeles, San Francisco, and Chicago, were all delivered to regional central warehouses by the end of last week.

Major supermarket chains, convenience stores, gyms, and retail outlets around university campuses have also completed stocking the products.

All promotional materials and staff training are ready.

Once the advertisement goes live, on-the-ground promotional activities can be launched simultaneously.

Functional chewing gum and energy bars will also be available at the same time, bundled with beverages for promotional purposes.

"Very good." Chen Bingwen expressed his satisfaction with Ling Peiyi's efficiency. "Manager Li, inform the US side that the advertisement is scheduled to air simultaneously on major television networks across the US next Saturday evening during prime time."

After launch, we immediately monitor sales data and market feedback across all channels.

"Understood!" Li Weiming and Ling Peiyi replied in unison.

Li Weiming then added, "Mr. Chen, following your instructions, we also contacted NBA players Earvin Johnson and Larry Bird."

They were just selected for the league this year and their popularity is rising rapidly. Their current endorsement fees are not too high.

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"If possible, sign a long-term contract directly."

Chen Bingwen decisively instructed, "Don't be afraid to spend money. With more spokespeople, we have more options to choose from."

"Okay, Mr. Chen."

After discussing the North American market, Ling Peiyi didn't close the folder immediately. She turned to the next page and said, "Mr. Chen, there's one more thing I need to report to you."

It's about the Wanglaoji herbal tea you asked me to follow up on, which is planning to use Tetra Pak packaging.

Chen Bingwen nodded, signaling her to continue.

"Tetra Pak of Sweden has provided a quote."

Ling Peiyi explained clearly, "The price of bottling production line equipment can be very low, almost like selling it for half price or giving it away, and it can even be offered as a financial lease."

Their real purpose and profit point lies in the subsequent continuous sales of packaging materials, Tetra Pak bricks themselves.

Each 250ml Tetra Pak bag costs nearly HK$0.2 more in packaging materials than the glass or PET bottles we currently use.

She paused for a moment, then continued her analysis: "If Wanglaoji herbal tea is rolled out on a large scale in the future, the accumulated costs will be quite considerable."

Moreover, Tetra Pak possesses extremely strong patent barriers. For every Tetra Pak package we produce, we essentially have to pay them a patent licensing fee, just like Coca-Cola and Pepsi have to pay to use our bottle caps.”

"Are there any other options?" Fang Wenshan interjected.

“Yes.” Ling Peiyi nodded. “There is a company in Germany called Combibloc. Their technology is similar to Tetra Pak's, but slightly different.”

Their packaging materials are slightly cheaper, but the technology involves pre-forming the packaging materials before filling, so the sealing and shelf life may be slightly inferior to Tetra Pak's aseptic cold filling.

More importantly, its patent system differs from Tetra Pak's, and its market share is far lower than Tetra Pak's.

Chen Bingwen was certainly aware of the situation with Tetra Pak and Combibloc. He knew that under the pressure of patents from these two liquid aseptic packaging companies, emerging domestic liquid aseptic packaging companies such as Fumei and Xinjufeng would emerge.

However, Tetra Pak, as the leader in the packaging industry, still firmly holds nearly 60% of the market share, with annual revenue approaching 10 billion US dollars.

After Ling Peiyi finished her report, Chen Bingwen slowly said, "Tetra Pak's model is to lock in customers with equipment and then make money by consuming materials."

This model is powerful, but in the long run, it will put us in a very passive position.

He looked at Ling Peiyi: "Director Ling, you should focus your research on this German company, Combibloc."

Examine their equity structure, technology patent reserves, and business operations.

I believe that as our beverage business grows larger, we cannot remain dependent on others forever.

Perhaps we could consider directly acquiring or taking a controlling stake in a packaging company that possesses core technologies.

A hint of surprise flashed in Ling Peiyi's eyes, but she quickly regained her composure: "Understood, Mr. Chen. I will immediately organize a team to conduct a detailed due diligence assessment of Kangmei Packaging."

If the acquisition is successful, we will not only save huge amounts of patent licensing fees, but we can also form our own patent barriers in the future through technology licensing and the establishment of industry alliances.

"That's exactly the idea." Chen Bingwen nodded approvingly. "This matter should be carried out quietly, and the feasibility should be assessed first."

"Okay, Mr. Chen."

After the meeting, Vincent Fang brought the latest report from Citibank's Christensen team to Chen Bingwen's office.

"Mr. Chen, Christensen reports that their acquisition of Hutchison Whampoa shares on the secondary market has encountered new developments."

Fang Wenshan reported, "Our shareholding ratio has reached 10.8%."

However, with the increase in shareholding and the decrease in the number of shares in circulation, it has become very difficult to continue to quietly accumulate shares on a large scale as before.

Recent operations, though conducted as discreetly as possible, seem to have begun to attract the attention of some astute investors in the market, and Hutchison Whampoa's stock price has shown a slight, slow upward trend.

10.8%!

This has already established it as a significant shareholder that cannot be ignored.

Continuing to buy things secretly is pointless and could easily give others a handle against you.

After a moment of contemplation, Chen Bingwen made a decision: "Since it's difficult to make acquisitions covertly anymore, let's just make them public."

With a 10.8% stake, we are already considered one of Hutchison Whampoa's major shareholders.

Hiding things makes us seem unclear about our intentions, easily arousing speculation and unnecessary vigilance.

"It's better to openly reveal your identity."

"Mr. Chen, what do you mean?" Fang Wenshan vaguely guessed.

"In the name of Sugar Heart Capital, we officially issued an announcement disclosing that we hold a 10.8% stake in Hutchison Whampoa."

In this way, we comply with regulations, appear to be aboveboard, and no one can find fault with us.

At the same time, we can clearly demonstrate our presence and strength to HSBC, and especially to Sir Michael Sandberg.

We can use this opportunity to formally express our interest in acquiring their stake in Hutchison Whampoa to HSBC and see their reaction.

Fang Wenshan laughed and said, "By revealing our identities, we can advance or retreat as needed. If HSBC is willing to talk, that would be best."

Even if they are unwilling, our 10.8% stake is enough to give us significant influence on the future Hutchison Whampoa board of directors, making us a force to be reckoned with as a check and balance.

He paused for a moment, then asked with a hint of doubt, "But Mr. Chen, are we really planning to acquire Hutchison Whampoa in its entirety?"

Given our current size, even with syndicated loans, swallowing a behemoth like Hutchison Whampoa would present immense financial pressure and subsequent integration risks.

Will this affect the development of our main business?

Chen Bingwen smiled and said, "Whether there are dates or not, we'll take the plunge."

Hutchison Whampoa is certainly a lucrative target, but as you said, a full acquisition would be extremely difficult, and forcing it might actually drag us down.

Our core objective has always been to cultivate Yingni in Qingzhou and to consolidate our own food and beverage business.

The acquisition of Hutchison Whampoa shares is more of a strategic investment and strategic move.

If it works out, I will be overjoyed.

If that doesn't work out, our 10.8% stake will ensure we're not excluded, and may even allow us to play a crucial role at critical moments.

Don't forget, any buyer who acquires Hutchison Whampoa shares from HSBC will need the support of major shareholders if they want to successfully integrate Hutchison Whampoa.

Just then, Ling Peiyi smiled and knocked on the door as she walked in: "Mr. Chen, Director Fang, I just received a message."

The two minority shareholders of Qingzhou Yingni that we contacted earlier have finally relented!

They agreed to transfer their total 4.3% stake to us at a 15% premium!

Upon hearing this, Chen Bingwen immediately perked up and said happily, "Are you sure? Finalize the agreement immediately and complete the transaction and transfer procedures as soon as possible to avoid any unforeseen complications."

After saying that, he asked Fang Wenshan, "Including the shares we've acquired in the market this week, what is our total shareholding in Qingzhou Yingni Ni?" "Just over 39%!" Fang Wenshan quickly calculated and replied with a smile, "Only 12 percentage points away from the 51% absolute control threshold!"
Cheung Kong Holdings has noticeably slowed its activity in the secondary market recently, likely due to significant funding pressures.

39%!

This is a very intimidating shareholding ratio.

With this shareholding ratio, Qingzhou Yingni can both attack and defend.

Chen Ji is now completely invincible.

Thinking of this, Chen Bingwen said seriously, "Director Fang, you should immediately issue an announcement in the name of Sugar Heart Capital."

Sugar Capital announced that it has become a significant shareholder of Hutchison Whampoa, holding 10.8% of the shares.

Fang Wenshan immediately replied, "Okay, I'll arrange it right away."

After the market closed that afternoon, Sugar Heart Capital officially submitted an announcement to the Securities Regulatory Commission and the stock exchange, disclosing that it had acquired 10.8% of the ordinary shares of Hutchison Whampoa Limited.

The news caused an uproar in the Hong Kong business community.

The financial sections of major newspapers were instantly in an uproar, with phones ringing incessantly as people rushed to confirm the news and rush to write their articles.

In the HSBC chairman's office, Sir Michael Sandberg held the newly delivered announcement document, his brow furrowed.

"Chen Bingwen of Sugar Heart Capital holds 10.8% of Hutchison Whampoa?"

"Young man, you've got quite an appetite."

He never expected that this young Chen Bingwen had quietly accumulated such a large hand of cards, and then chose to play them suddenly at this particular time.

After putting down the announcement document in his hand, Sir Michael Sandberg pondered for a moment and dialed his secretary's number: "Help me arrange a dinner appointment with Mr. Li from Cheung Kong Holdings."

"Go after them and get the detailed evaluation reports on Sugar Heart Capital and Chen Ji Foods on my desk as soon as possible."

At the headquarters of Cheung Kong Holdings, Li Ka-shing received an urgent briefing from his secretary, Hung Siu-lin, and his face instantly darkened.

The funding for the Tin Shui Wai project and the stock price of Ching Chau Ying Ni had already given him a huge headache. Unexpectedly, Chan Ping-man quietly got involved with Hutchison Whampoa and even acquired shares that could influence the situation!

“10.8%,” he muttered to himself, pressing his finger firmly on the number in the briefing. “They got 10.8% so quietly. They’re really something else.”

At Swire Group headquarters, several senior executives are also holding an emergency meeting.

As shareholders of Hutchison Whampoa, they were surprised by the sudden emergence of Sugar Heart Capital.

"Chen Bingwen? The one from Chen's Foods? How did he get involved in Hutchison Whampoa's affairs?"

"A 10.8% stake is no small amount. What is he planning to do?"

"HSBC has been looking for someone to take over their shares. Could it be him?"

"We must contact Sim Bi immediately and get to the bottom of this. We can't let the situation get out of control."

Jardine Matheson's taipan, Newbridge, also received the news, but his reaction was relatively calm.

The sudden acquisition of a large number of Hutchison Whampoa shares by a Chinese-owned company may indicate that the traditional British-dominated structure is being challenged.

“A 10.8% shareholding is enough to get a seat on the board of directors.”

Newbijian said to the financial director next to him, "What is Chen Bingwen trying to do?"
Is it a purely financial investment, or is there another motive?

"It's not clear at the moment."

But his choice to go public, rather than continue to keep the acquisition secret, suggests that he may want to use this opportunity to seek more.

"Yes, keep a close eye on the follow-up news. Let's see how Shen Bi responds."

This kid has stirred up the waters even more.

As the party involved, Hutchison Whampoa Group, upon receiving the news from the stock exchange, was thrown into complete chaos.

As a representative of Hutchison Whampoa's current management, Wyman has been trying to maintain a balance between HSBC and major shareholders and to push for corporate restructuring.

He held the announcement in his hand, his brow furrowed.

Another influential shareholder has joined, and their intentions are unclear.

This undoubtedly adds new variables to his management work.

He instructed his assistant: "Prepare a detailed background report on Sugar Heart Capital immediately."

At the same time, make informal contact with them to probe their intentions—whether they are seeking a board seat or have other plans.

He needs to figure out what this new major shareholder is thinking as soon as possible in order to adjust his own strategy.

For a time, undercurrents were swirling in Hong Kong's business community, and everyone's attention was focused on Sugar Heart Capital and its young boss, Chan Ping-man.

The next morning, as soon as Chen Bingwen arrived at his office on the top floor of the Weiye Building, he instructed his secretary, Ali, "Help me connect with the HSBC chairman's office and tell him that Chen Bingwen of Sugar Heart Capital would like to schedule a time to discuss the equity matters of Hutchison Whampoa in person."

Revealing the 10.8% hand is only the first step; taking the initiative to knock on the door is the real attack.

He couldn't wait for Shen Bi and Li Jiacheng to reach an agreement before approaching them; he had to seize the initiative, even if it was just to create an opportunity for a face-to-face conversation.

A few minutes later, Ali came in to report: "Mr. Chen, Sir Michael Sandberg's secretary said that the Sir has about twenty minutes of free time at 10:30 this morning."

"Reply to them that I will be there at 10:30 sharp."

Chen Bingwen glanced at his watch; there was just enough time for him to prepare.

At 10:25, Chen Bingwen's Mercedes-Benz stopped in front of the HSBC headquarters.

Led by his secretary, he entered Sir Michael Sandberg's spacious office, which overlooked Statue Square.

"Sir Sir Michael Sandberg, greetings. I apologize for the intrusion and disturb you."

Chen Bingwen extended his hand and greeted him respectfully.

Shen Bi emerged from behind his desk, shook hands with Chen Bingwen, and wore a standard smile that revealed little emotion.
"Mr. Chen, please sit down."

Coffee? Or tea?

"Coffee, thank you, no sugar." Chen Bingwen sat down on the sofa opposite Shen Bi.

After a brief exchange of pleasantries, Sir Michael Sandberg picked up his coffee cup and said with a smile, "Mr. Chen's interest in Hutchison Whampoa has surprised me somewhat."

From what I understand, Mr. Chen's core business appears to be in the food and beverage sector.

Chen Bingwen smiled slightly, “The gentleman is right, Chen’s started out as a dessert shop.”

However, as an independent investment platform, Sugar Heart Capital has a broader perspective.

We are optimistic about the future of Hong Kong Island in the long term, especially its core assets such as real estate and ports.

Hutchison Whampoa's high-quality port and land resources align perfectly with our long-term strategic direction of being optimistic about the development of Hong Kong Island.

As a key financial investor and strategic partner, we are willing to work with major shareholders like HSBC to support the management team's efforts to help Hutchison Whampoa overcome its difficulties and achieve a revaluation.

Sir Michael Sandberg stirred his coffee gently, saying noncommittally, "The situation at Hutchison Whampoa is quite complicated and requires a lot of resources and effort to reorganize."

As a bank, HSBC's long-term holding of such a large amount of non-financial equity is not the best option.

We are also actively seeking a suitable solution to comply with regulatory requirements and our responsibilities to Hutchison Whampoa's shareholders.

Knowing the time was right, Chen Bingwen immediately seized the opportunity and said sincerely, "That's why we believe that shareholders like Sugar Heart Capital, who are patient and willing to support the company's long-term development, may be a beneficial addition to Hutchison Whampoa's future."

Although we are young, we have ample determination and financial resources.

He paused, looked directly at Sir Michael Sandberg, and said solemnly, "In fact, the reason I have come here today is to inform HSBC that Sugar Heart Capital is interested in acquiring all of HSBC's shares in Hutchison Whampoa."

Chen Bingwen's words immediately silenced the office.

Shen Bi put down his coffee cup, his face still smiling, but his eyes sharpened: "Mr. Chen, Sugar Heart Capital holds 10.8%, making it a major shareholder."

HSBC holds 33.65%, making it the single largest shareholder.

The scale of this transaction and its impact on Hutchison Whampoa's future are enormous.

I'd like to know, what gives Sugar Heart Capital the confidence and capability to do this?

Chen Bingwen was prepared for Shen Bi's question and confidently replied, "We understand the significance of this deal."

Our confidence in doing so stems primarily from our assessment of Hong Kong Island's future and our analysis of the value of Hutchison Whampoa's assets.

As for strength,”

Chen Bingwen met Shen Bi's direct gaze and said confidently, "It's mainly based on the steady development of our core business and the strong cash flow it generates."

He paused briefly to organize his thoughts before continuing, "Chenji started with food and beverages, and this business is our foundation, as well as the origin of the name 'Sugar Heart Capital'."

Currently, our "Pulse" energy drink not only maintains a leading market share in Hong Kong Island, but also is making smooth progress in expanding into Southeast Asia and North America, with rapid sales growth providing us with stable and considerable profits.

“In addition,” Chen Bingwen added, “we have just completed the acquisition and integration of Watsons.”

Watsons’ extensive retail network across Hong Kong Island opens up new avenues for our future growth.

The healthy operation and continued improvement in profitability of these core businesses are the foundation of our confidence in considering major strategic investments.

Shen Bi listened quietly, his expression neither agreeing nor questioning.

Chen Bingwen knew that simply showing off his muscles wasn't enough; he needed to further clarify his intentions.

"Moreover," Chen Bingwen changed the subject, emphasizing, "we are already a major shareholder holding 10.8% of the shares."

I have firsthand experience with the situation and problems of Hutchison Whampoa.

"Our taking over this stake will ensure a smooth transition and minimize disruption to Hutchison Whampoa's normal operations, which in itself is a significant asset."

“I heard Mr. Chen’s confidence in his business.”

Shen Bi slowly began, “Chen Ji’s achievements in the food industry are indeed impressive.”

However, the experience and resources required to manage a conglomerate like Hutchison Whampoa are quite different from those required to run a beverage company.

HSBC must take responsibility for Hutchison Whampoa's future and choose a leader who can guide it out of its predicament and into a new era, not just a financial investor.

(End of this chapter)