Chapter 15: The Investigation Results Were Unexpected

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As a professional, Zhi Xue Su naturally knew exactly how to obtain stock information.

Soon, he was busy making calls in the office.

Hao Ran Lin was in no rush; instead, he picked up a newspaper and began reading.

The newspaper, purchased from a street stand on his way back, was the Hong Kong Economic Daily.

Sure enough, there was a report concerning Wharf Holdings.

As expected, after the Shipping King publicly announced he had no intention of acquiring more shares in Wharf Holdings, the stock price promptly fell from its peak of HK$49, accompanied by a significant drop in trading volume.

The Shipping King’s shares had originally been acquired from Li Jiacheng; he had not purchased Wharf Holdings stock on the open market, so investors naturally believed his statement.

With no more bargains to be had and speculators gone, the share price plummeted.

According to the article, Wharf Holdings closed at HK$38 per share yesterday, a substantial decline, though trading volume remained modest.

Currently, sell orders in the stock market have increased markedly, many originating from retail investors who, due to delayed information or misreading market signals, hurriedly placed sell orders, often becoming the "chopped grass" in market fluctuations.

Ordinary investors tend to buy on rising prices out of a desire for profit but often overlook the market’s complexity and risks.

Such behavior causes them to buy at market highs and, when the trend reverses, makes escape difficult, resulting in being "harvested" by the market makers or forces.

Hao Ran Lin frowned as he examined the stock price.

HK$38 per share was far from the lowest price.

However, the HK$50 million loan funds had not yet arrived, so Wharf Holdings was in no hurry to enter the market.

Since his time slip, he was delighted to discover not only had he gained a unique insight into loyalty but also that his memory had miraculously enhanced, granting him an extraordinary photographic memory.

Articles and materials he had read in his previous life now vividly resurfaced in his mind as if experienced just yesterday.

Wharf Holdings, a well-known enterprise, was among the companies he had paid attention to in his past life.

This was why he had formulated a plan upon seeing the news about Wharf Holdings earlier.

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In his recollection, soon after the Shipping King’s announcement, Wharf Holdings’ stock price sharply declined to a low of HK$21 per share.

Therefore, the current price had yet to reach its bottom.

His strategy for Wharf Holdings was to remain calm and observe, focusing primarily on price movements.

He understood that in the stock market, timing often mattered more than choice.

Hence, he was not eager to act immediately but patiently waited for the price to fall to a level he deemed reasonable or undervalued.

To maximize returns from this investment, he needed to control costs at purchase, minimizing his average acquisition price.

He planned to accumulate shares gradually during periods of market pessimism and price pressure, leveraging market fluctuations to reduce his holding costs.

Putting down the newspaper, Hao Ran Lin sat back in his chair, awaiting Zhi Xue Su’s investigation results.

After a few more minutes, Zhi Xue Su finally set down the telephone.

His notebook was filled with many notes and figures.

“Mr. Lin, I have gathered the information you requested,” Zhi Xue Su said, looking up at Hao Ran Lin.

“Good, report it. I’m listening,” Hao Ran Lin nodded.

“First, Wharf Holdings has experienced significant recent stock volatility. It previously peaked at HK$49 per share but has been falling steadily. Yesterday’s closing price was HK$38.56, a 23% drop from the previous day. After today’s opening, the price quickly slipped further. The latest transaction I received is HK$34.23 per share, with moderate trading volume.

Regarding Qingzhou Yingni, this is a stock I have long followed and understand well. It has shown relatively stable price performance over time. Its actual controlling shareholder is British, holding 12.6% of shares. Based on the current price, the company’s market capitalization is roughly HK$238 million—a modest increase compared to last year.

However, some earlier data I found indicates Qingzhou Yingni not only boasts a strong business foundation but also owns 800,000 square feet of waterfront land in Hung Hom, Hong Kong. At current land prices, this parcel alone is worth at least HK$500 million, excluding the value of their comprehensive industrial chain. This suggests Qingzhou Yingni’s stock price is severely undervalued.

There is a notable gap between Qingzhou Yingni’s stock price and its intrinsic value, possibly due to limited market awareness, conservative investor outlooks on future growth, or other market factors.

Currently, Qingzhou Yingni has many sell orders on the market, but prices remain stable, with no collapse despite the volume.

Just now, the latest transaction price for Qingzhou Yingni was HK$4.76 per share…”

Zhi Xue Su detailed all the information he had gathered and researched to Hao Ran Lin.

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Market capitalization over HK$200 million?

This surprised Hao Ran Lin; he had thought Qingzhou Yingni was merely a cement factory, and a market cap of HK$100 million would have been acceptable, never expecting it to exceed HK$200 million.

In his previous life, Li Jiacheng’s acquisition of Qingzhou Yingni was only briefly mentioned in related materials, without in-depth coverage or detailed records of the acquisition process.

In contrast, major companies like Wharf Holdings, Hutchison Whampoa, and Hongkong Electric Group, with their vast market capitalizations and profound influence, had their mergers and acquisitions comprehensively documented, with clear accounts.

This was understandable since Qingzhou Yingni’s scale and influence paled compared to industry giants like Wharf Holdings and Hutchison Whampoa.

Yet, realizing that Qingzhou Yingni owned such a large tract of land in central Hung Hom, valued at over HK$200 million, indeed seemed like a bargain.

No wonder Li Jiacheng later targeted this company.

British-owned enterprises today are indeed attractive acquisition targets.

Take Wharf Holdings, which has been making headlines on the stock market recently. Based on actual valuation, its market capitalization could reach HK$4 to 5 billion—a true industry giant.

At the end of last year and the beginning of this year, Wharf Holdings’ stock hovered between HK$13 and HK$14 per share. With roughly 100 million shares outstanding, its market capitalization fluctuated around HK$1.4 billion.

Such discrepancies between stock market capitalization and actual value—where market caps are severely undervalued—are common in Hong Kong, especially among British-owned enterprises.

This explains why Chinese capital consortia continuously eye these British firms for acquisition and gradual absorption.

“Go to the stock exchange and get me half a year’s worth of trading records for Qingzhou Yingni. I’ll wait here,” Hao Ran Lin instructed, showing no haste to have Zhi Xue Su act immediately.

“Understood, Mr. Lin. I’ll head there now. Please wait,” Zhi Xue Su replied and quickly left the room.

About ten minutes later, Zhi Xue Su returned, holding several A4 sheets clipped together, densely covered with data.

“Mr. Lin, here are Qingzhou Yingni’s daily trading records for the past six months. I obtained them through contacts at the Hong Kong Stock Exchange,” Zhi Xue Su handed the papers to Hao Ran Lin.