Chapter 23: Formulating a New Plan

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Lin Haoran examined the stocks he currently held and estimated the cash flow over the past month. During this period, he had not only invested his personal 1.5 million Hong Kong dollars into the stock market but also raised 50 million Hong Kong dollars through loans. Aside from withdrawing 500,000 Hong Kong dollars as miscellaneous expenses, the remaining 49.5 million Hong Kong dollars had been fully deposited into the bank account linked to his stock account. Therefore, his total capital invested in the stock market amounted to 51 million Hong Kong dollars.

Specifically, with regard to Qingzhou Yingni’s shares, over the past month, he had successfully purchased 6.45 million shares. As the stock price averaged 4.96 Hong Kong dollars per share, this portion of his investment cost him about 31.99 million Hong Kong dollars. As for Wharf Holdings’ stocks, although he had only started acquiring them five days ago, he had already purchased 387,900 shares at an average price of 23.05 Hong Kong dollars per share, spending approximately 8.94 million Hong Kong dollars.

Adding these two investments together, his total expenditure thus far reached roughly 40.93 million Hong Kong dollars. This meant that Lin Haoran still had about 10.07 million Hong Kong dollars in available funds. However, given his ambitious plans ahead, this sum of just over ten million Hong Kong dollars was clearly insufficient.

After all, his investment blueprint was not limited to continuing to increase his holdings in Qingzhou Yingni’s stock but also aimed at gaining control over a larger portion of Wharf Holdings’ shares. Considering that he would later rely on trading Wharf Holdings’ stocks to generate enough margin to repay the substantial loan, the current amount of capital was rather tight.

Therefore, how to make efficient use of every penny would be a crucial issue for Lin Haoran moving forward. How could he raise another round of funds?

Lin Haoran soon had an idea. His gaze settled on the Qingzhou Yingni shares in his possession. Recalling his previous agreement with Yang Changdao, he had promised to mortgage stocks worth about 20 million Hong Kong dollars to Yumin Finance Company once he had acquired a sufficient number of shares. However, that contract stipulated a six-month period, meaning he still had ample time to maneuver.

Since the six-month deadline was still far off, Lin Haoran was in no rush to immediately pledge his stocks to Yumin Finance Company.

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On the contrary, he saw an opportunity to leverage these shares to increase his loan limit further and thus acquire more stocks. According to his knowledge of the Hong Kong stock market at the time, the kind of leveraged financing that relied on holding shares as collateral for further margin loans had not yet emerged. Such practices would only appear in the late 1980s.

Since the stock market itself did not offer direct leverage investment opportunities, Lin Haoran resolved to create leverage effects himself. He planned to use his shares as collateral to secure financing from financial institutions or individual investors to obtain more capital and expand his stock investment portfolio.

Through this approach, he could indirectly achieve the effect of leverage investment—controlling a larger asset base with relatively less of his own capital. To others, this strategy entailed certain risks. But having studied the history of the Wharf Holdings stock accumulation campaign, Lin Haoran knew it carried no risk at all.

In a vast market like Wharf Holdings, the tens of millions of Hong Kong dollars he was about to invest were but a drop in the ocean, unlikely to shake its solid market position or overall trajectory. Hence, he decided not to hasten fulfilling his agreement with Yumin Finance Company. Instead, he would use the time before the deadline to maximize the value of his holdings through stock price fluctuations and potential growth, laying a solid foundation for his future stock market endeavors.

Since Wharf Holdings’ stocks were slated for sale in the coming months based on circumstances, they were clearly unsuitable as collateral for loans. Given this reality, Lin Haoran had no choice but to use the Qingzhou Yingni shares as collateral.

Currently, the market value of his Qingzhou Yingni shares exceeded 30 million Hong Kong dollars. With such quality stocks as security, he expected to easily secure a loan exceeding 30 million Hong Kong dollars from financial institutions.

Once he formulated this strategy, all his worries dissipated. He planned to simultaneously advance his investment in both Wharf Holdings and Qingzhou Yingni stocks, each complementing the other and jointly driving his wealth growth. Lin Haoran was very confident that with careful planning and steady execution, he could achieve his desired returns on both stocks.

Setting down his notebook, Lin Haoran noticed that Su Zhixue had yet to leave. He gently said, “Zhixue, you should head home now. Your son is in a critical phase of recovery. Having more people at home to care for him will help him recover faster. It’s better if you both accompany him.”

Reflecting on the surgery Su Zhixue’s son had undergone two weeks prior, which had gone very smoothly, they had since embarked on a meticulous rehabilitation journey.

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Given this, Lin Haoran had been very understanding recently, advising Su Zhixue to leave promptly after the stock market closed at 4 p.m. each day, so he could devote himself fully to family care.

Since Su Zhixue had not yet formally established a company nor set up stringent corporate regulations, there was no need to be overly rigid or strict in management.

“Thank you, President Lin. I’ll head back now,” Su Zhixue said gratefully as he took his leave.

After Su Zhixue departed, Lin Haoran began to ponder in his office. Clearly, if he wanted to use his Qingzhou Yingni shares to secure a loan, it would not be feasible to do so through Yumin Finance Company.

So, which bank or financial institution would be suitable for the loan?

Undoubtedly, the largest financial institution in Hong Kong at the time was Huifeng Bank. To establish a foothold in the city, building a good relationship with them was essential. Moreover, obtaining a loan from Huifeng Bank would be more convenient as they possessed stronger cooperative resources.

Of course, their loan policies were more rigorous and comprehensive. The kind of arrangement Yumin Finance Company had—lending 50 million Hong Kong dollars against collateral worth just over 10 million—would be impossible at Huifeng Bank.

Another consideration was that Qingzhou Yingni was also a British-owned enterprise. If Lin Haoran directly applied to Huifeng Bank for a loan to increase his stake and become a major shareholder, the news might leak, bringing unnecessary risks.

At present, Lin Haoran had no intention of publicly disclosing his status as a major shareholder in Qingzhou Yingni. He chose to maintain a low profile to avoid attracting excessive market attention and unnecessary volatility. This strategy would help him advance his investment plans steadily and announce them at a more appropriate time in the future.

However, if he could negotiate in person with senior executives at Huifeng Bank, especially with the top executive Shen Bixia, he might not need to worry excessively. Executives of Shen Bixia’s caliber usually uphold strict confidentiality and would be unlikely to compromise their professional integrity and reputation over information regarding a company of Qingzhou Yingni’s moderate scale.

What remained uncertain was whether a loan of 30 million Hong Kong dollars would be significant enough to attract Shen Bixia’s attention.