Chapter 401: Buying into Hang Seng Bank and the Beginning of Property Liquidation
"Ho Sin Hang?" Yang Wendong thought for a moment, then nodded. "Alright. When?"
"He said he'll go with your schedule," the assistant replied. "You're free the day after tomorrow in the afternoon."
"Okay. Then arrange for the meeting to take place at the Four Seasons Hotel, Presidential Suite No. 1," Yang Wendong instructed.
"Understood. I'll make the arrangements," the assistant said.
Three days later, Yang Wendong met Ho Sin Hang at the Four Seasons. After a round of polite greetings, Ho Sin Hang got straight to the point.
"Mr. Yang, what's your opinion of Hang Seng Bank?" he asked.
"What do you mean?" Yang Wendong raised an eyebrow. The question seemed vague and abrupt.
Ho Sin Hang smiled. "I mean in terms of future potential—scale, growth prospects, and overall strength."
"Oh, well, in those terms, it's excellent," Yang Wendong replied with a nod. "Hang Seng Bank is now the largest Chinese-owned bank in Hong Kong. Its size far surpasses what Liu Chong Hing Bank was back then.
And as for Liu Chong Hing's past... well, everyone knows how that went. They recklessly overextended with no regard for risk. Hang Seng is in a much better position."
Although Hang Seng would soon face a bank run that would ultimately lead to its acquisition by HSBC, Yang Wendong didn't believe that would be the bank's fault. No institution could survive infinite withdrawals, no matter how well-managed.
Hang Seng's recent explosive growth was not due to recklessness but to strong roots, prudent operations, and perfect timing—riding the economic boom of early-60s Hong Kong.
"Haha, thank you for the kind words. But I still think my Hang Seng Bank is not quite on par with Changxing Group," Ho Sin Hang said modestly. "That's actually why I wanted to ask—Mr. Yang, would you be interested in buying into Hang Seng Bank?"
Yang Wendong was surprised. "Hang Seng Bank is seeking financing? I didn't think you'd be short on capital. Is there a major project underway?"
That did catch him off guard. Given Hang Seng's current success, capital should have been plentiful—unless there were new plans requiring a significant influx, like East Asia Bank bringing in outside capital years ago to fund expansion. At that time, Yang Wendong didn't have the financial muscle or strategic position to participate, so he passed on it.
"There's no major investment project at the moment," Ho Sin Hang clarified with a smile. "I'm preparing to take Hang Seng public."
"You want to list Hang Seng?" Yang Wendong was thoughtful. "But the Hong Kong Stock Exchange isn't exactly friendly to Chinese-owned firms. It's not easy to get listed."
Before Li Fook Chiu founded the Far East Exchange in 1969, the Hong Kong Stock Exchange was the city's only exchange—and it was dominated by British capital. Listings were typically restricted to British companies or certain quasi-public entities. Chinese capital had a hard time breaking in.
The logic was simple. There were only so many "sheep" (retail investors) to be fleeced. The British firms wanted that capital for themselves. Letting Chinese companies raise funds and gain visibility could lead to competition, and in Hong Kong, most companies made their money locally.
"It's difficult, yes, but not impossible," Ho Sin Hang said confidently. "Almost all the listed companies on the exchange are British-owned. That has caused growing dissatisfaction among Chinese capitalists, the media, and even some government officials of Chinese descent.
Hang Seng is the largest Chinese-owned bank in Hong Kong. I think I'm the right person to push this forward. And if I succeed, future listings for Chinese firms will become much easier."
Yang Wendong nodded. "That may be true. But doing this will definitely offend quite a few British interests—not to mention the colonial administration. Is it really worth it?"
"It is," Ho Sin Hang said firmly. "Whether for me personally or for the broader Chinese business community, someone has to take this step. If Hang Seng wants to grow further, we must go public. A listing doesn't just mean greater name recognition in Hong Kong—it opens doors to overseas markets."
"You're planning to expand overseas?" Yang Wendong asked. "That won't be easy."
"No, it won't," Ho Sin Hang admitted. "But we have to try. Otherwise, we're stuck in this tiny city, and our future is capped.
Only by going global can we break through that ceiling—just like Changxing Industrial."
"True. Going public would definitely help with overseas expansion," Yang Wendong agreed. "Mr. Ho, I must say—you've got real ambition."
In the original timeline, Hang Seng Bank collapsed during a bank run in 1965 and was subsequently acquired by HSBC. Although the Ho family retained honorary titles and nominal control, they lost actual power. Their bigger plans were shelved by their new British parent company.
It was understandable. Someone like Ho Sin Hang would naturally want to push beyond Hong Kong and make a mark overseas. That kind of ambition wasn't rare among top entrepreneurs.
After all, real entrepreneurs are the ones who keep going even when they know the road ahead is hard. Without that mindset, no one becomes great.
"You flatter me, Mr. Yang. In fact, you're far ahead of me. I heard you're even planning to invest in the UK?"
Yang Wendong nodded. "Yes, though the UK's a bit messy right now. But I'll be careful. I'll hire locals—whites only—to avoid unnecessary issues."
The UK in the 1960s was politically unstable. Post-WWII labor shortages had led Britain to open immigration to people from its colonies. As a result, large numbers of Black, Indian, and other non-white immigrants entered the country. By the mid-60s, their population had swelled into the millions, and tensions exploded. The far-right rose, and racial unrest became widespread.
"I'm sure you've already considered all that. I'm just being nosy," Ho Sin Hang smiled. "Back to business. Hang Seng's IPO will require more shareholders.
First, it's a regulatory requirement. Second, we want to gather a coalition of Chinese capital so we can improve our odds of success."
"How much equity are you offering me?" Yang Wendong asked.
"Just 2–3%," Ho Sin Hang replied. "Not too much, not too little. And I'll give you a non-executive director seat on the board. What do you think?"
"What's the valuation?" Yang Wendong asked.
"That's not finalized yet," Ho Sin Hang replied. "I'm still in talks with other Chinese investors. Once they're confirmed, we'll settle on a unified valuation."
"Alright then." Yang Wendong nodded. "2 to 3 percent is fine. Once you finalize the other details, we'll move forward."
Even if Hang Seng collapsed next year in a bank run, whether it could be saved was uncertain. But even if it wasn't, Yang Wendong might end up owning shares in the HSBC-controlled Hang Seng Bank. That would still be a solid investment.
Hang Seng had been well built by Ho Sin Hang, and even under HSBC's management, it would remain a strong bank. By getting in now, Yang Wendong could later intervene officially as a shareholder without looking like he was opposing HSBC.
"Excellent," Ho Sin Hang said. "Once things progress, I'll invite you and the other investors to discuss the IPO at Hang Seng's headquarters."
"Sounds good," Yang Wendong replied.
After some small talk, Ho Sin Hang left.
Back at Changxing Tower, Yang Wendong summoned Zheng Zhijie and asked, "How much do we currently owe Hang Seng Bank?"
"Roughly 40 million HKD," Zheng Zhijie replied. "Over the past few years, we've purchased a lot of properties and land, mostly using small capital injections of our own. Hang Seng and East Asia Bank provided the bulk of the loans.
Of the two, Hang Seng's larger, so we borrowed more from them. Some of the loans for Changxing Industrial's factory expansions also came from Hang Seng, but not many."
"That's fine," Yang Wendong nodded. "It's already mid-year. As per our original plan, start liquidating all non-core properties.
Keep the Central office building, a few high-quality street-front commercial units on Hong Kong Island, and any other truly prime assets. Sell the rest. Everything must be liquidated by year-end."
If it were just a few small parcels, he could wait until the last minute. But this involved millions of square feet of property. The market needed time to absorb it. Selling early would prevent a crash and ensure better prices.
"It's a common saying among tycoons: don't try to catch the last dollar," Yang Wendong said. "And it's true. Because in reality, they can't catch that last dollar. Offloading major assets takes time."
"Understood. I'll take care of it," Zheng Zhijie said. He already knew this was the plan. The group had been tightening its real estate investments since last year. Now it was time to fully exit and cash out.
"And once we've liquidated," Yang Wendong continued, "treat the profits as ours and use them to repay any outstanding bank loans."
"You want to repay the banks? Not hold back some liquidity for future use?" Zheng Zhijie asked.
"No need," Yang Wendong said, shaking his head. "I don't have much faith in Hong Kong's economy in the short term. Any new investments can be financed through local banks where they happen. That also helps us build good will with local powers."
This was, in a way, Yang Wendong's farewell gift to Hang Seng Bank—giving them a big repayment before their impending crisis. With those funds, maybe they'd survive a little longer during the run.
Of course, whether it would make a real difference—or if Hang Seng would simply loan the money back out again before the crash—was beyond his control.
"Understood," Zheng Zhijie replied.
"And one more thing," Yang Wendong added. "Aside from the property itself, we need to lock down our leasing business. Get five-year contracts signed with all clients—even if it means offering a discount."
These "discounts" were relative to current rental rates. But by next year, Hong Kong's property and rental prices would drop by over 50%. By 1967, they'd be down to just 20% of current levels.
For individual tenants, Yang Wendong wouldn't push this hard. But businesses were a different story. Everyone was gambling on their own vision. No one was being forced into anything.
And if some companies couldn't afford the rent and left—and the units went vacant—he could always lower the rent later and earn himself a reputation as a "kind landlord." It would be a win-win.
Zheng Zhijie smiled. "No problem. That's already in the works."
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