Rebirth in Hong Kong: From Dessert Shop to Industrial Empire

Chapter 23 Two-pronged Approach (Please add to your favorites, vote for monthly tickets, recommend this book, and keep reading!)

"On Wharf Holdings' trading screen, after 2 PM, several consecutive buy orders of over 1,000 lots suddenly appeared, causing the price to jump directly from 13.6 to 18.2, with a sharp increase in trading volume!"

Rumors are circulating that a mysterious buyer is making a large-scale buying spree. Our analysis suggests that significant news may be about to be announced!

Chen Bingwen's heart skipped a beat, and he gripped the microphone tightly.

It's here! This is no ordinary fluctuation. Such a concentrated, massive, and fierce buying spree can only be the signal that a long-brewing acquisition war has officially begun!

Is Li Ka-shing, who has been hiding behind the scenes, finally unable to hold back any longer and about to publicly unsheathe his sword?

Wharf Holdings is not an ordinary listed company; it is a constituent stock of the Hang Seng Index.

It occupies the most central location since the opening of Hong Kong Island and is one of the most important core assets of the British-owned Jardine Matheson. It controls about 70% of the cargo handling, storage and transportation and ferry services on Hong Kong Island and is known as the "economic lifeline of Hong Kong Island".

Wharf Holdings owns coveted prime assets, including vast warehouse sites across both sides of Victoria Harbour in Tsim Sha Tsui and Causeway Bay, warehouse terminals in the Western District of Hong Kong Island, and the Star Ferry.

In Hong Kong Island, where land is extremely valuable, especially against the backdrop of the economic boom in the 1970s and the skyrocketing land prices.

The vast and prime warehouse and dock sites held by Wharf Holdings have a real value that is far greater than their book value as dock warehouses. Their potential value, which can be converted into commercial real estate or residential development, is already as valuable as a buried gold mine.

However, fate tricked people.

In the mid-1970s, the global shipping industry was plunged into a severe recession. Wharf Holdings, which started with docks and warehousing and whose main business was these, had its stock price firmly stuck at a low level and was shivering in the market winter.

The market only saw its dismal profits and heavy shipping asset burden.

At the same time, Jardine Matheson's controlling stake in Wharf Holdings was not very high, only around 5%-15%. In the eyes of the capital market, this was undoubtedly a deadly temptation, like a child carrying gold through a bustling city.

A few days ago, a seemingly ordinary financial commentary was quietly published in the Sing Tao Daily.

A perceptive financial commentator published an article titled "Wharf Holdings' Business Begins to Transform."

The article unusually breaks away from the market's stereotypes and pessimistic sentiments about Wharf Holdings as a "shipping terminal company," boldly pointing out the value of its vast prime land resources.

The report also predicted that "if Wharf Holdings can make full use of its land resources and actively transform and expand its real estate development, it could achieve a good momentum of 20% annual growth over the next 10 years."

Wharf Holdings stock will be one of the most promising and hot stocks to watch in 1978!

The value of this commentary is like a pebble thrown into a deep pool.

Ordinary stock market investors may be bewildered by its cryptic language and advanced arguments, or simply dismiss it as a routine financial prediction.

However, in the eyes of some people with ulterior motives, this commentary is an important confirmation signal before the rallying cry is sounded.

"Manager Zhang, is the source reliable? Can you find out the buyer's background?"

"It's very unclear! The orders were placed by several different local brokerage firms, and the method was very covert, but the scale and consistency of the orders were definitely not the work of retail investors. We are also conducting an urgent internal investigation."

Mr. Chen, your position is currently showing a considerable unrealized profit. Would you consider taking some profits to secure your gains? Volatility may increase!

Manager Zhang's tone revealed professional caution and a hint of subtle probing.

Chen Bingwen's operation of leveraging 300,000 yuan of principal to generate 900,000 yuan has always been a sword hanging over his mind.

Although as a financing institution, even if Wharf Holdings' share price goes to zero, as long as the positions are closed in time, the only loss will be the clients' margin deposits.

However, this would be a significant stain on his performance record.

Therefore, it's best for customers to avoid losing money if possible.

"No!" Chen Bingwen said decisively, his voice steady and powerful. "Manager Zhang, thank you for the reminder."

But my judgment remains unchanged; this is likely just the beginning.

Please continue to monitor the market for me. Notify me immediately of any unusual movements. My stop-loss order is very clear; just strictly adhere to it.

The unusual stock price movement of Wharf Holdings is like a boulder thrown into a calm lake, creating increasingly large ripples in Hong Kong's capital market.

In the following days, the stock price did not fall as some bears had expected. Instead, it stabilized above HK$18 and began to rise gently with increasing volume.

Various rumors are flying around in the market:

There are reports that internal divisions have emerged within Jardine Matheson, and the Keswick family, the major shareholder, intends to reduce their holdings.
It is said that a wealthy Southeast Asian Chinese businessman has his eye on the Ocean Terminal site in Tsim Sha Tsui owned by Wharf Holdings.
Some even went so far as to name Li Ka-shing directly, speculating that Cheung Kong Holdings was secretly acquiring him.

These rumors, some true and some false, are mixed in with the casual conversations in tea restaurants and the hustle and bustle of stock exchanges.

The Hong Kong Economic Journal's financial section featured a headline: "Wharf Holdings' trading activity remains active; identity of the mysterious buyer remains a mystery; could Jardine Matheson's controlling stake be challenged?"

The report provided a detailed analysis of Wharf Holdings' asset value, with particular emphasis on its prime land holdings in Tsim Sha Tsui and Causeway Bay.

Professional analysis ignited the enthusiasm of more investors, and retail investors began to flock in, driving the stock price steadily up to HK$30.5.

Chen Bingwen's account showed a rapid increase in unrealized profits.

With a principal of 300,000 and leverage of 3 times, the average cost of buying with 900,000 in capital is approximately HK$13.2.

Based on the current price of HK$30.5, the unrealized profit has exceeded HK$900,000! The enormous wealth figures jumping around in the account are enough to make anyone's blood boil.

But he remained unusually calm.

After the market closes each day, he still carefully reads all relevant reports and company announcements.

He knew that the real battle had not yet begun, and this stock price fluctuation was just dessert and appetizer before the main course.

The real feast is yet to come.

Jardine Matheson would never sit idly by while its core assets were coveted by others, and its anti-takeover sword could be drawn at any time.

In the Kwun Tong Industrial Estate, a factory larger than the Cheung Sha Wan Food Factory is bustling with activity as equipment is installed and tested.

Gao Zhenhai practically lived and worked on the construction site, replicating the production line according to the standards of the Changsha Bay factory, along with Zhong Qiang and a group of key personnel.

Stainless steel cooking pots, mixers, cooling tanks and other equipment were carefully hoisted into place.

Chen Bingwen would occasionally come over to check on the factory area, which was beginning to take shape, and to inspect the equipment installation and construction progress.

"Brother Wen, the equipment will be fully debugged next week. The first batch of twenty workers we recruited have already started training at the Cheung Sha Wan factory. The Kwun Tong factory will definitely be in production by the end of the month!" Gao Zhenhai wiped the sweat from his face, his tone full of enthusiasm.

After the Victoria Park Lunar New Year Fair and this period of experience, he has lost much of his naivety, and his brows now show more of the responsibility of a factory manager.

"Good!" Chen Bingwen patted him on the shoulder. "Production is only the first step; quality control is the key."

The products from the Kwun Tong factory must be exactly the same as those from the Cheung Sha Wan factory; the taste, sweetness, and consistency must be exactly the same.

This is the lifeblood that allows us to survive in the market.

Then Chen Bingwen said to Zhong Qiang, "Brother Qiang, the equipment operation manual and quality control process are all up to you." Zhong Qiang nodded vigorously, "Don't worry, boss, I've memorized the formula and process parameters, and I'll personally oversee the key processes."

In terms of logistics, Ah Sheng's "Shunda Logistics" is operating more and more smoothly.

Two used trucks, painted in striking red and bearing the "Shunda Logistics" logo, shuttle daily between the Cheung Sha Wan Food Factory and twenty mobile points and five standard stores in Kowloon.

Ah Sheng seems to have found the joy of "legitimate business," managing the fleet with considerable skill. His men have stable incomes and respectable status, making them highly motivated.

Chen Bingwen only met with Ah Sheng periodically to understand the operation and costs, and completely delegated the specific management authority to Ah Sheng.

The five "Chan Kee Dessert Stations" located in the core business districts of Mong Kok, Yau Ma Tei, Tsim Sha Tsui, Causeway Bay, and Central have become landmarks.

The uniform red signboard with gold lettering, bright glass counters, staff in neat red aprons, and consistently delicious desserts quickly won over white-collar workers and city residents.

Within just half a month of opening, the daily turnover easily exceeded three thousand bowls.

Lu Shanshan, the manager of the Central branch, a capable woman who had switched jobs from a long-established tea restaurant, was excitedly reporting to Chen Bingwen, who had come to inspect the business: "Mr. Chen, the queue during the lunch rush stretches to at least the street corner!"

Many office workers from nearby buildings are calling to reserve afternoon tea dessert sets for their entire departments! Ginger milk curd and sesame paste are the best-selling items!

Standing in a relatively quiet corner of the shop, Chen Bingwen observed the orderly yet bustling scene in front of the counter, and nodded affirmatively: "It's a good thing that business is booming, but it's precisely at times like these that we can't compromise on quality and service."

Try not to keep customers waiting too long. If you need to temporarily dispatch staff, you can contact Factory Manager Gao Zhenhai in advance, and he will make the arrangements.

Central, top floor of Jardine House.

Outside the huge floor-to-ceiling windows was a bustling view of Victoria Harbour, and sunlight streamed onto the carpet, but it did nothing to dispel the heavy, oppressive chill in the conference room.

Niu Bijian's face was so gloomy it looked like it could be wrung out of water.

As the chairman of Jardine Matheson and the guardian of Kowloon Wharf, the glass ashtray in front of him was piled high with cigarette butts, and the air was filled with the pungent smell of burning tobacco.

On either side of the long conference table, a group of Jardine Matheson executives sat upright, barely daring to breathe.

The scattered reports and stock price charts on the conference table were alarming.

Analysts have just finished their report, and the latest data shows that the shareholding of the hidden buyer is approaching at an alarming rate.

With both acquisitions in the secondary market and private transfer agreements, they may be just one step away from breaking the 20% controlling stake threshold.

How could Newbjörn not be anxious!
"Useless! All of you are useless!" Newbijian finally couldn't suppress his anger. He slammed his hand on the table, making the cups and saucers rattle. "Let a bunch of Chinese point guns at our heads right under our noses!"
Why were there no effective countermeasures earlier? Why were market rumors allowed to fester?

His bloodshot eyes swept over the crowd, and his voice was sharp and piercing.

For decades, Jardine Matheson has adhered to the policy of "making money in Hong Kong Island and developing overseas".

As a result, the overseas investment front was too long, the return on investment was low, and a heavy financial burden was incurred.

Now, facing internal strife, they want to buy more Wharf Holdings shares at a high price but can't afford it.

A terrible silence fell over the conference room, broken only by Newbigen's heavy breathing.

In the corner, a senior financial advisor gently pushed up his glasses and cautiously broke the silence, his voice trembling slightly with nervousness: "Chairman, perhaps there is another option."

"Speak!" Newbjern cried out as if he were a drowning man grasping at a straw.

"We asked HSBC for help and asked them to fund our stock buyback."

Niu Bijian's gray eyes suddenly contracted.

HSBC, the uncrowned king of Hong Kong's financial world.

Bowing to it would be tantamount to drinking poison to quench thirst, but recalling the bold article in the Hong Kong Economic Journal that predicted the soaring value of the Kowloon Wharf land, he felt a chill run down his spine.

The opponent's knife was already at his neck; there was no time to hesitate.

"Contact Shen Bi as soon as possible!" His voice was hoarse, filled with a desperate resolve, "No matter the cost!"

February 20th, Kwun Tong Industrial Area.

At five o'clock in the morning, the factory building of Chen Ji Dessert Guantang Food Factory was brightly lit.

After nearly half a month of intensive construction, the new factory in Kwun Tong has finally started production.

The official commencement of production at the Kwun Tong plant was like a shot in the arm for the rapidly growing Chan Kee Dessert.

The pressure on the Cheung Sha Wan plant has been greatly reduced, allowing it to focus more on refined production and new product development in the Kowloon West region.

With its advantageous geographical location and production capacity, the Kwun Tong plant quickly became a solid support for the expansion of Kowloon East and the eastern part of Hong Kong Island.

Twenty industrial mobile points in Sham Shui Po, Cheung Sha Wan, and Lai Chi Kok, with their uniformly styled red food trucks and efficient delivery services provided by Shunda Logistics, have long been the preferred choice for workers to take a lunch break.

After the Kwun Tong plant's production capacity was released, more than ten new mobile points were quickly added in the industrial areas of Shek Kip Mei, To Kwa Wan, and Kwun Tong.

Red food carts bearing the name "Chen's Dessert" spread rapidly across Kowloon's industrial landscape like wildfire.

However, rapid expansion has also brought new challenges.

The absolute consistency of personnel management, supply chain coordination, and quality control is like a taut string.

That afternoon, Chen Bingwen was at the Kwun Tong factory with Zhong Qiang discussing the standardized recipe for the new dessert "Coconut Milk Sago Pudding".

Gao Zhenhai came out of his office and went straight to the two of them.

"Brother Wen, there's been a bit of a problem at the Kwun Tong factory."

Gao Zhenhai's tone was unusually anxious and guilty.

"Don't rush, tell me slowly, what happened?" Chen Bingwen frowned slightly.

"It's sesame paste. The latest batch from the Kwun Tong factory was delivered to several distribution points in Yau Tong and Lam Tin, and customers reported that the taste was wrong, not as fragrant as before, and a bit bitter."

Gao Zhenhai's voice was full of self-blame, "I checked the production records, the raw material batches were fine, the process parameters hadn't changed, and the workers were all being monitored, but the taste just wasn't right!"

The staff at those locations called back saying that some customers have requested refunds.

"There's a problem with quality control!" Zhong Qiang's expression changed instantly, and he shouted before Gao Zhenhai could finish speaking.

For Chenji Dessert, which relies on word of mouth and standardization, this is the most fatal core pain point!
He and Chen Bingwen exchanged a glance, both seeing the seriousness in each other's eyes.

Chen Bingwen's brows furrowed even more. He had just been pleased with the new factory's capacity release and accelerated expansion. The market was like a wildfire, but even a single spark within the factory was enough to ignite the entire grassland!

"Immediately! Stop all production and shipment of sesame paste from the Kwun Tong factory!" His voice was firm and authoritative, carrying an undeniable air of authority.

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