Chapter 15: The Investigation Results Were Unexpected
As a finance professional, Su Zhixue naturally knew exactly how to obtain stock information.
Very soon, he began making one phone call after another from his office.
Lin Haoran wasn't in any hurry. Instead, he picked up a newspaper and began reading.
It was a copy of the Hong Kong Economic Daily that he had bought from a roadside newsstand on his way back.
Sure enough, it contained a report about Wharf Holdings.
As expected, after King Pao Yue-kong publicly announced that he had no intention of purchasing additional Wharf shares, the stock price quickly fell from its peak of HK$49 per share, accompanied by a sharp decline in trading volume.
After all, Pao had acquired his shares directly from Li Ka-shing, rather than purchasing them through the stock market, so investors naturally believed his public statement.
Seeing that there was no longer any easy profit to be made, the speculators disappeared, and the stock price inevitably plunged.
According to the article, Wharf had closed yesterday at HK$38 per share, representing a substantial decline, although trading volume remained relatively light.
At present, sell orders had increased significantly. Many of them came from retail investors who, due to delayed information or misreading market signals, hastily rushed to sell. As was often the case, they became the market's "leeks"—the ones harvested by larger players.
Ordinary retail investors tended to chase rising prices out of a desire for quick profits, often overlooking the complexities and risks hidden behind market movements.
This behavior frequently led them to buy near market peaks. Once the trend reversed, they found themselves unable to escape being "harvested" by institutional investors and major market forces.
Looking at the stock price, Lin Haoran frowned.
HK$38 per share was still far from the bottom.
However, the HK$50 million loan had yet to arrive, so there was no rush to enter the Wharf position.
Ever since transmigrating into this world, he had pleasantly discovered that not only had he gained a cheat ability that allowed him to see people's loyalty, but his memory had also undergone a miraculous enhancement. He now possessed an almost photographic memory.
Articles he had once read and materials he had once browsed in his previous life resurfaced vividly in his mind, as though he had read them only yesterday.
Wharf was such a famous company that he had paid close attention to it in his previous life.
That was why, upon seeing the news about Wharf earlier, he had immediately formulated his investment plan.
If he remembered correctly, after Pao released his announcement, Wharf's share price had continued its steep decline, eventually bottoming out at HK$21 per share.
So, the stock had not yet reached its lowest point.
His strategy toward Wharf was simple—remain calm and continue observing its price movements.
He understood that in the stock market, timing was often more important than selection.
Therefore, he had no intention of acting immediately. Instead, he would patiently wait until the stock fell to what he considered a fair—or even undervalued—price.
If he wanted to maximize his profits from this investment, he needed to control his acquisition cost by keeping his average purchase price as low as possible.
To achieve that, he planned to gradually build his position while market sentiment remained pessimistic and the stock price stayed under pressure, using the market's volatility to reduce his average cost.
Putting down the newspaper, Lin Haoran sat quietly in his chair, waiting for Su Zhixue's investigation results.
Several minutes later, Su Zhixue finally hung up the telephone.
His notebook in front of him was already filled with notes and figures.
"Mr. Lin, I've obtained the information you requested," Su Zhixue said, raising his head.
"Mm. Go ahead and report it," Lin Haoran nodded.
"First, regarding the Wharf Holdings. The stock has been extremely volatile recently. It previously reached a high of HK$49 per share, but has been falling continuously ever since. Yesterday it closed at HK$38.56 per share, down 23% from the previous trading day.
"After today's market opened, Wharf's share price continued to fall rapidly. The latest transaction price I just received is HK$34.23 per share, and trading volume remains relatively low.
"As for Qingzhou Yingni, I've followed this stock for quite a long time, so I'm quite familiar with it.
"It has traditionally been a relatively stable stock. The company's actual controlling shareholder is British, and its largest shareholder owns 12.6% of the company.
"Based on its current share price, the company's total market capitalization is approximately HK$238 million. Compared with the same period last year, its stock price hasn't risen significantly.
"However, according to information I gathered earlier, Qingzhou Yingni not only has a strong core business, but also owns 800,000 square feet of prime waterfront land in Hung Hom, Kowloon.
"Based on today's land prices, that land alone is worth at least HK$500 million, and that's not even including the value of its well-established industrial chain.
"It can be said that Qingzhou Yingni's current stock price is seriously undervalued.
"There is a significant gap between the company's market valuation and its intrinsic value. This may be due to insufficient market recognition, investors taking a conservative view of its future prospects, or other market factors.
"Currently, there are quite a few sell orders in the market for Qingzhou Yingni, but the asking prices have remained relatively stable. Despite the large number of orders, the price hasn't collapsed.
"The latest transaction price is HK$4.76 per share..."
Su Zhixue carefully briefed Lin Haoran on everything he knew, along with all the information he had investigated.
A market capitalization of over HK$200 million?
That came as quite a surprise to Lin Haoran.
He had assumed Qingzhou Yingni was merely a cement manufacturer. In his estimation, a market value of HK$100 million would already have been respectable. He hadn't expected it to exceed HK$200 million.
In his previous life, Li Ka-shing's acquisition of Qingzhou Yingni had only been mentioned briefly in historical materials.
There were no detailed accounts of the acquisition process or its finer details.
By contrast, the acquisitions of giants such as Wharf Holdings, Hutchison Whampoa, and Hongkong Electric had been extensively documented, with every step of the process clearly recorded.
That was only natural.
Compared with industry titans like Wharf and Hutchison Whampoa, Qingzhou Yingni simply couldn't compete in either scale or influence.
Still, once he considered the fact that the company owned such a massive parcel of land in Hung Hom, right in the heart of the city, a market valuation of just over HK$200 million was undeniably cheap.
No wonder Li Ka-shing had set his sights on the company afterward.
British-owned enterprises at this stage were indeed highly attractive acquisition targets.
Take Wharf, for example.
Based on its actual asset value, the company was worth HK$4 to 5 billion, making it an absolute corporate giant.
Yet at the end of last year and the beginning of this one, Wharf's stock had hovered between HK$13 and HK$14 per share.
With approximately 100 million outstanding shares, its total market capitalization had been only around HK$1.4 billion.
This enormous disparity between market capitalization and intrinsic value—where companies were severely undervalued by the stock market—was far from uncommon in Hong Kong, especially among enterprises controlled by British conglomerates.
That was precisely why these British-owned companies later became prime targets for acquisitions by Chinese business groups, gradually being swallowed up one after another.
"Go to the stock exchange and get me Qingzhou Yingni's trading records for the past six months," Lin Haoran instructed instead of ordering Su Zhixue to start buying immediately.
"I want to review them here while I wait."
"Understood, Mr. Lin. I'll head there right away. Please wait a moment."
Su Zhixue accepted the order and quickly left the office.
About ten minutes later, he returned.
In his hand was a stack of several A4 sheets fastened together, densely packed with numerical data.
"Mr. Lin, these are Qingzhou Yingni's daily trading records for the past six months. I managed to obtain them through an acquaintance at the Hong Kong Stock Exchange."
He handed the documents to Lin Haoran.
(End of Chapter)
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