Chapter 203: CMB Goes Public and Securing the Veto Power
The few days of the Lunar New Year holiday passed quickly.
For Yang Wendong, there wasn't much difference between holidays and workdays. Unlike the typical business owner who labored tirelessly, he operated from the vantage point of someone who understood the macroeconomic trends of the future. That gave him immense clarity and confidence.
As long as his strategic direction was sound and no catastrophic mismanagement occurred, the business would continue to grow along his intended path.
By the end of the month, Yang Wendong arrived at Ganghua Tower unusually early—earlier even than the standard workday start time.
Also arriving early was Zheng Zhijie from Changxing Real Estate, along with a few trusted aides.
"Good morning, Mr. Yang," they greeted as he entered the meeting room.
"Good morning," Yang smiled and nodded. "Thank you all for coming so early—it's much appreciated."
"You're too kind, Mr. Yang. This is our responsibility," Zheng replied with a smile, and the others echoed him.
Once seated, Zheng began to brief him. "Mr. Yang, we've already finalized a cooperation agreement with Standard Chartered Bank. After China Motor Bus goes public today, they'll start purchasing scattered shares on our behalf."
"Can they be trusted to maintain strict confidentiality?" Yang asked.
"No problem," Zheng replied. "We've signed a binding agreement. Besides, banks like Standard Chartered, HSBC, Mercantile, and even some Chinese-owned financial institutions serve many major companies in Hong Kong.
If they were ever caught leaking client information—even unintentionally—it would be a massive blow to their credibility."
"Good," Yang nodded. "So, we wait for CMB to go public. How many shares are they releasing?"
Zheng said, "According to the public statement from the Hong Kong Stock Exchange, CMB has a total of 1 million shares, priced at HK$12 each. They're releasing 250,000 shares to the public."
"So that's a total valuation of HK$12 million," Yang chuckled. "Not bad. It'll probably rise another 30–40% after listing."
Zheng laughed, "That's likely. CMB has a monopoly on public transportation on Hong Kong Island. Despite high operational costs, it serves hundreds of thousands of passengers daily. Annually, net profits are around HK$1 million.
Plus, CMB holds a lot of property and land—valuable assets. A PE ratio of 12 is actually quite low. I expect the price to stabilize around HK$18 per share."
"A million-plus in annual profit—that's not bad at all," Yang nodded. "A small cash cow."
In his previous life, most people in the mainland knew that city buses typically operated at a loss, heavily subsidized to support low fares and economic growth.
But in capitalist regions, that was far from the norm. The best one could hope for from the government was preventing fare-gouging by monopolistic operators.
Zheng added, "Exactly. Otherwise, Yim Shing-kun wouldn't be so desperate to raise capital through an IPO and expand his bus routes."
"Alright then. Let's get started," Yang said. "Once CMB lists, instruct Standard Chartered to begin acquiring shares immediately. It's the first day, so even if multiple accounts buy in aggressively, it won't raise suspicions."
Under normal conditions, a company's stock price moves slowly. Large-scale buying tends to attract attention, especially from the issuing company or market analysts.
But on IPO day, increased activity is normal and can be attributed to investor enthusiasm.
Zheng smiled. "If we buy enough, Yim Shing-kun might be tempted to issue even more shares after seeing the surge in price."
"Even better," Yang said calmly. "The more they issue, the better it is for us."
Zheng hesitated. "But if that happens, Yim's side will raise a lot of capital."
"That's a double-edged sword," Yang replied. "What's the media status?"
"All prepped," Zheng said. "Reporters from several newspapers have already interviewed residents from underserved neighborhoods. We're just waiting for the right time to publish."
"Perfect. Once the fundraising is done, let's fan the flames. Spin the story: the government will invest heavily in public infrastructure on the Island, and citizens demand more bus routes.
With Wong Yiu-nam's people inside CMB, we'll push Yim to commit to another fleet expansion."
"Understood," Zheng nodded.
Yang asked, "So, are we heading to Standard Chartered Bank now?"
"Not quite. They have a dedicated floor near the Hong Kong Stock Exchange for handling sensitive trades. It's not just Standard Chartered—many large financial firms have similar setups nearby," Zheng explained.
"Alright, let's go," Yang said.
In the pre-internet era, proximity was everything—especially for time-sensitive financial deals. Sure, phones were useful, but being physically close was often far more efficient.
Hong Kong's financial heart was in Central. Ganghua Tower to Standard Chartered's branch was just a short walk.
Several senior Chinese executives from Standard Chartered were waiting to receive them and soon led them to a VIP trading room.
By 9 a.m., the Hong Kong Stock Exchange opened. China Motor Bus's stock began trading.
Multiple phones in front of Yang began to ring. A trader picked up one call, said a few words, then turned to Yang. "Mr. Yang, CMB stock is up. In just five minutes, it's risen 10 cents—now at HK$12.10."
"Our orders are going through as well?" Yang asked.
"Yes," the trader replied. "The sharp price jump is partly due to our volume."
"Good. Keep buying. Just update me on pricing periodically," Yang said without hesitation.
In an acquisition battle, securing the target shares is everything. As long as the price isn't outrageous, you buy.
"Understood," the trader said and returned to the task.
Zheng leaned in. "Mr. Yang, I'll monitor their trades. I'll report back if anything comes up."
"Alright, go ahead," Yang nodded.
As he watched the ancient process of phone-based trading unfold, Yang couldn't help but feel nostalgic for the days of computers and digital trading.
Yes, computers existed in 1961—but they were massive, commercial machines. Personal computers were still 15 years away.
Even if he tried to speed things up, there were limits. Technological revolutions required foundational science to mature first.
From PCs to arcade machines to electronic watches and calculators—all of it needed the underlying tech infrastructure to be in place before it could happen.
So Yang simply leaned back in his chair, glancing at the news reports while keeping one ear open for updates from the Standard Chartered traders.
On the other side, inside the trading floor, chaos reigned. The stock of China Motor Bus (CMB) was surging rapidly—faster than most new IPOs in recent memory. It looked to be the breakout stock of 1961, possibly even the year's dark horse.
By late afternoon, the sun was casting a warm red glow across the western sky.
Back at the Standard Chartered satellite office, the previously nonstop ringing of telephones abruptly went silent. Yang Wendong, reading the newspaper, immediately noticed the change. He glanced at the clock on the wall and asked, "Five o'clock already? The exchange closed?"
"Yes," Zheng Zhijie said as he walked over, his face full of excitement. "Mr. Yang, we've successfully acquired 5.6% of the shares today. It's a huge win."
"5.6%?" Yang nodded. He had been receiving updates all day, and by mid-afternoon, he already knew they'd passed 5%.
"What was the final share price for CMB today?" he asked.
"HK$21.70," Zheng replied. "Total market value is HK$21.7 million. The price jumped nearly 80.8% in a single day. That kind of first-day gain—frankly, it's one of the highest in the history of the Hong Kong stock exchange."
"Looks like we had quite the impact," Yang said with a grin. "So, how much did we spend?"
Under typical market conditions, a new stock might rise 30–40% if it's a good IPO. A 50–60% jump is considered excellent. But 80%? That was explosive.
Of course, this was the 1960s. In the future, during the dot-com or tech booms, such numbers would become almost ordinary.
Zheng answered, "Our average purchase price was HK$18.60 per share. We bought 56,000 shares—so we spent HK$1.0416 million in total."
"Acceptable," Yang nodded. "Do you think today's activity will arouse suspicion from Yim Shing-kun or others?"
"It was a bit unusual, but probably won't raise too many eyebrows," Zheng replied. "It's the first day of trading—spikes like this are common. This was our best window for a large-volume acquisition.
Starting tomorrow, we'll be buying from individual investors or institutions. Any large transactions could be flagged."
"Right," Yang said. "But 5.6% still isn't enough. Wong Yiu-nam only holds 24.8% now.
Our first goal is to secure veto power. So, over the next few days, keep buying until we get there."
"Understood," Zheng said. "If Mr. Wong can convince CMB to issue another round of shares, that would help."
"That depends on Yim Shing-kun's personality," Yang replied.
At CMB Headquarters...
Yim Shing-kun was beaming with pride. "Everyone, today's IPO brought in over HK$3.5 million. This might be one of the most successful listings in Hong Kong's history!"
"Congratulations, Mr. Yim," his subordinates cheered and clapped.
Yim laughed. "All of you present today will receive an extra three months' salary!"
"Thank you, Mr. Yim!" The gratitude was genuine—money talked.
Only Wong Yiu-nam remained indifferent. He subtly gestured to a bespectacled middle-aged man sitting nearby.
That man spoke up, "Mr. Yim, the market's very optimistic about our future. Should we consider issuing more shares and raising additional capital?"
"More shares?" Yim frowned. "Why?"
"Well," the man explained, "Jardine Matheson is about to go public. Most financial analysts predict that when they do, it will attract huge capital inflows.
Investors might sell other holdings to buy Jardine's shares, which could include CMB's stock."
"Makes sense," Yim said, clearly impressed. "Still, market fluctuations are normal. No need to overreact."
"True," the man acknowledged, "but the market favors us right now. This is the time to raise capital.
Later, if prices drop, we can use part of the IPO proceeds to buy back shares—essentially a free profit. With our current valuation, that could mean HK$500,000 to HK$600,000."
"HK$600,000?" Yim hesitated. Though he was now worth millions on paper, liquid cash was another story. And the IPO funds already had designated uses.
But an extra HK$600,000 was half a year's profit for CMB.
"Or," the man continued, "we could reinvest all the funds and increase our company's shareholding."
"Alright, I'll consider it," Yim nodded.
Wong Yiu-nam stayed silent. But from Yim's expression, he could tell the plan was working. He had to admit—Yang Wendong's strategy was brilliant. It was almost irresistible.
One week later, early March.
Yang met again with Wong Yiu-nam. "Mr. Wong, I now hold 7.2% of the shares. How's your side?"
"Mine haven't moved. I didn't buy any extra—I don't have the cash. But I've held onto my original stake," Wong replied with a smile.
Yang nodded. "I'll continue accumulating shares slowly."
Wong shook his head. "No need. I came today with good news—Yim is planning another issuance in two days, about 5% of total equity."
"Oh?" Yang's eyes lit up. That was the opportunity he needed to hit the veto threshold.
Wong continued, "You'll have the veto power after this. But we shouldn't use it yet."
"Of course," Yang agreed. "Getting our foot in the door is what matters. I'll keep buying, but realistically, it'll be tough to go much beyond 15%.
With only about 30% of shares on the market after the next issuance, holding 15% already puts us close to the limit."
Wong nodded. "I'll try talking to other shareholders—see if they're willing to sell or at least support me."
"Winning them over won't be easy," Yang said. "Better to just buy their shares. No need to pinch pennies.
Also, make sure CMB's current cash is spent quickly. The less money Yim has, the better our chances during the final takeover."
"Leave that to me," Wong grinned.
Yang raised his glass. "Then here's to our success—and to you, Mr. Wong, fulfilling your father's dream and taking control of CMB."
"Thank you. I'm relying on your support, Mr. Yang." Wong clinked glasses with him.
He knew full well that if they succeeded, Yang would effectively control CMB. But at this stage, he had no better option.
Two days later.
CMB issued more shares, and Standard Chartered quickly bought 2.7%. That brought Yang's total stake to exactly 10%.
With Wong Yiu-nam's 24.8%, they had achieved what they needed—
the veto power was now in their hands.
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