Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 229 Off-stage (Seeking monthly tickets, recommendations, and subscriptions!)
"Manager Gao Zhenhai is currently based in Guangzhou, where he is responsible for coordinating production at the Dongguan factory, connecting with foreign trade and transportation companies, and liaising with inland sugar and wine companies."

Ling Peiyi added, "The biggest challenges at present are cost control and logistics efficiency."

Although the prices of raw materials and labor are lower in the mainland, the cross-provincial transportation involves more steps and more frequent loading and unloading, resulting in a higher loss rate than in Hong Kong Island.

Moreover, the settlement method is complicated, and if foreign exchange settlement is used, the cycle is long;
If the received RMB is used for settlement, the funds will be tied up in mainland China, and a suitable use or currency exchange channel needs to be found.

Chen Bingwen nodded; these problems were all expected.

"Cost control is the key. Tell Gao Zhenhai that, apart from the key concentrate which still needs to be supplied from Hong Kong Island for the time being, the proportion of other raw materials such as white sugar and fruit pulp that are sourced locally should be further increased. Packaging materials can also be produced by suitable manufacturers in the mainland to reduce tariffs and transportation costs."

In terms of logistics, we work closely with China Resources and mainland foreign trade companies to optimize processes and reduce transshipment.

As for the RMB funds that have been deposited,” he paused, “there are a few directions: one is to purchase equipment parts or packaging materials that we need for our future expansion in the mainland.
Secondly, we should look for suitable small-scale projects related to food and beverage with small investment amounts that we can tentatively participate in or invest in, even if it's just to secure a position and familiarize ourselves with the environment.
Thirdly, we should support Gao Zhenhai and his colleagues in improving their living and working conditions in mainland China; this money should be spent.

At this point, he changed the subject and looked at Ling Peiyi, asking, "You've been in mainland China for a while now. What are your thoughts on the potential of the mainland market?"

Ling Peiyi had clearly thought about this question and answered clearly: "The potential is huge, without a doubt, but it does require a great deal of patience."

At this stage, the key is to establish a high-end, high-quality brand image through limited international channels and to accumulate experience in dealing with mainland government agencies and state-owned enterprises.

While the purchasing power of ordinary people is indeed still limited, based on my observations over this period, it represents a huge, slowly recovering market.

I suggest that at this stage, we should deepen and refine our existing overseas sales outlets, serve every customer well, cultivate a group of early loyal consumers, and at the same time take this opportunity to gain a deeper understanding of the mainland's distribution system, regional differences, and consumption habits, so as to prepare for future market expansion.

Furthermore, we need to deepen our cooperation with mainland official institutions such as China Resources, as this will be more beneficial than harmful to our long-term development in the mainland.

"Yes, that's basically the same as what I was thinking. We need to cultivate the mainland market with a deep and meticulous mindset, not be in a hurry for short-term sales, and we must have a long-term vision."

"The growth there will be exponential in the next ten or twenty years," Chen Bingwen affirmed. "You've had a hard time on this trip. Take a couple of days off and go back to spend some time with your family."

Going forward, you will still be in charge of overseeing the development of the mainland market, while Gao Zhenhai will be responsible for frontline execution and coordination.

If you need any support from headquarters, just send me a report.

"Thank you, Mr. Chen," Ling Peiyi replied, feeling a sense of relief. It seemed her boss had a clear understanding of the long-term nature of the mainland market, which eased her pressure considerably.

While Chen Bingwen was making steady progress on multiple fronts, Li Jiacheng was not idle either.

At the headquarters of Cheung Kong Holdings, Li Ka-shing frowned slightly as he looked at the confirmation document on the table regarding the first payment for the Tin Shui Wai project.

This expenditure of HK$150 million was like adding another constraint to his already strained cash flow.

Although the sale of some shares in Qingzhou Yingni has brought in some funds, the company's cash flow remains tight as it faces multiple residential projects being pursued simultaneously and subsequent investments in the Central MTR overpass project.

His original plan was to acquire the remaining Hutchison Whampoa shares held by HSBC, and he even hoped to get them for free by using loans provided by HSBC to acquire the shares held by HSBC.

However, perhaps it was due to the sudden emergence of Chen Bingwen.

Not only did it take the lead in acquiring a controlling stake in Qingzhou Yingni, but it also demonstrated considerable strength and acumen in the capital market, which made Sir Michael Sandberg and the HSBC board of directors somewhat cautious in dealing with the remaining Hutchison Whampoa shares.

Although Sir Michael Sandberg still favored Lee Ka-shing, he no longer proposed overly favorable financing options, instead emphasizing commercial principles and maximizing HSBC's interests.

This means that if Li Jiacheng wants to acquire the remaining shares, he will need to raise far more money than he expected.

“Ah Qian,” Li Jiacheng said to Zhou Jinqian beside him, “it seems we need to step up our communication with HSBC.”

We need to make them understand that it is in the best long-term interests of HSBC and all its shareholders for Cheung Kong Holdings to integrate Hutchison Whampoa.

"If we don't act quickly to acquire the Hutchison Whampoa shares held by HSBC, I'm worried that things might get complicated and unforeseen circumstances might arise."

Chen Bingwen put immense pressure on Li Jiacheng. He had a feeling that this young man would not be satisfied with Yingni in Qingzhou and must have designs on Hutchison Whampoa, and might even be secretly taking action.

He must speed up.

Zhou Jinqian nodded in agreement, but he also had some concerns.

Given Cheung Kong's current financial situation, it would be extremely difficult for them to acquire the remaining massive shares of HSBC in one go.

"Mr. Li, at HSBC, although Sir Michael Sandberg supports us, there are other voices on the board."

Moreover, it's unlikely that the previous discounts will be available again.

Should we consider bringing in other consortia to collaborate, or acquiring a partial stake first?

Li Jiacheng shook his head and firmly rejected the idea, saying, "Hutchison Whampoa must be led by Cheung Kong Holdings. Introducing other consortia would introduce too many variables and would be detrimental to subsequent integration."

I'll figure out a way to solve the funding problem.

You continue to seek opportunities to gain a stronger voice on the Hutchison Whampoa board. Also…” He paused, a cold glint in his eyes, “keep an eye on market movements, see if any other funds are eyeing Hutchison Whampoa.” Zhou Jinqian immediately understood Li Jiacheng’s implication: “You’re worried about Sugar Heart Capital…”

"One should always be wary of others. Chen Bingwen is quick and audacious; one cannot judge him by ordinary standards."

Li Jiacheng said in a deep voice, "Although on the surface he has just taken over Yingni in Qingzhou and should have some time to digest it, who knows if he will launch a surprise attack?"

“I understand, Mr. Li. I will keep an eye on it,” Zhou Jinqian replied solemnly.

Meanwhile, at a private club on the other side of Hong Kong Island, Sir Michael Sandberg was chatting with several British business tycoons.

The topic gradually shifted to the recently prominent Chen Bingwen and the undercurrents of the Hutchison Whampoa equity dispute.

"Smurf, what are HSBC's plans regarding those Hutchison Whampoa shares? They can't just keep holding onto them forever, can they?" a senior executive from the Jardine Matheson Group asked, half-jokingly.

Sir Michael Sandberg took a sip of whiskey and smiled faintly: "HSBC is a bank, not a long-term holding company. It will naturally be disposed of at the right time and at the right price."

Currently, we are still in talks with Mr. Li Jiacheng.

“I heard that Chen Bingwen, who started out making sweet soup, is also interested in Hutchison Whampoa?” another representative from Swire interjected. “The young man is very ambitious. He’s made Yingni in Qingzhou very successful.”

A subtle, complex look flashed across Shen Bi's eyes: "Mr. Chen is indeed very capable and has a unique perspective."

However, acquiring a conglomerate like Hutchison Whampoa requires more than just drive and financial resources; it also demands experience, connections, and the ability to manage complex situations.

In this respect, Mr. Li Jiacheng is clearly superior.

His words revealed HSBC's preferred choice, but did not completely rule out the possibility of Chen Bingwen, skillfully leaving room for maneuver.

This seemingly casual conversation quickly reached Chen Bingwen's ears through certain channels.

He was not surprised by Sir Michael Sandberg's attitude, as HSBC and Lee Ka-shing were already deeply intertwined.

But this only strengthened his resolve to find another way and accelerate his covert planning.

A few days later, Canning Fok brought some preliminary analysis of Cheung Kong's shareholder structure.

“Mr. Chen, Cheung Kong’s shareholding is relatively concentrated, with the Li family holding a very high percentage of shares, exceeding 40%.”

On the institutional investor side, the main players are several British-funded funds and local Chinese-funded banks, whose shareholdings are relatively stable.

The proportion of retail investors is not particularly high.

Buying enough shares on the secondary market to influence the situation is both difficult and risky.

"What about off the field? Have you spotted any opportunities?"

“There are some clues.” Huo Jianning opened his notebook. “There is a fund registered in Bermuda that holds about 2.1% of Cheung Kong’s shares, and has held them for two years.”

This fund appears to be making some asset adjustments recently, and we are trying to gauge its willingness to sell through intermediaries.

In addition, a businessman who invested in Cheung Kong in its early years is now older and focuses his main efforts on overseas markets. He holds about 0.8% of the shares and may also cash out.

However, these negotiations will take time, and the price may be at a premium to the market price.

"The premium is negotiable, but the key is secrecy and efficiency," Chen Bingwen instructed. "Get things moving quickly, and let me know immediately if there's any progress."

"Understood." Just as Chen Bingwen was focusing on his stake in Cheung Kong Holdings, good news came from North America.

The "Pulse Thunder" production line has been successfully upgraded and debugged, and can now be put into small-batch trial production.

Upon receiving this news, Chen Bingwen immediately instructed Li Ming: "Contact familiar distributors and key clients immediately, send samples over, and collect feedback."

At the same time, prepare a listing plan for "Pulse Thunder" quickly and create a sensational effect.

"Yes, Mr. Chen!" Li Ming's voice was filled with excitement.

The North American team is gearing up for a big push.

However, the market response was not entirely smooth. Feedback came quickly after the first batch of "Pulse Thunder" samples were sent out.

Some traditional supermarket chains and distributors are cautious about this new product with its strong flavor and high caffeine content, worried about its market acceptance.

One distributor even bluntly stated, "This tastes like medicine; would anyone actually drink it like a beverage?"

Li Ming was somewhat frustrated and reported the situation to Chen Bingwen.

(End of this chapter)