GBP #508 - The final link
#508 - The final link
Nourishing things silently, no one expected this wave of personnel changes to be the beginning of a new era.
To Ren Zhong, it seemed difficult to promote talent without being constrained by convention, but finding promising young people to nurture was a viable path.
Now, not to mention other companies, the Dawn Group alone has over a million employees, and every year, tens of thousands of young undergraduates and graduate students preferentially choose to join the Dawn Research Institute and its affiliated companies.
In terms of talent accumulation, the Dawn Group claims to be second to none, and no other company dares to claim the top spot.
Coupled with the behemoth that is the Dawn Research Institute, with its 100,000+ high-end researchers, Ren Zhong prioritizes selecting and cultivating talent from within his own system, precisely because he holds such a large talent base.
Xue Xiaofeng is just the first model; next will be the second and third.
Hong Kong, in this world of 'Bright Sword,' has seen even faster growth due to the rapid rise of Dongda.
In the 1960s, Hong Kong had already become one of the most prosperous cities in the Far East.
Due to its open financial policies, Hong Kong is also one of the leading financial centers in the Far East, with a wealth of capital that allows companies from all countries in the 'Bright Sword' world to apply for listing, provided they meet the conditions of the Hong Kong Stock Exchange: 'three ones'—revenue exceeding 100 million US dollars, profit exceeding 10 million, and being established for over a year.
As long as they accept Hong Kong's unified accounting standards, they can apply for listing in Hong Kong.
These rules seem simple, but in reality, companies need to operate for several years and reach a certain scale to have any chance of meeting these standards.
In smaller countries, it's even difficult to find a company that can generate revenue of 100 million US dollars. Yet, even with such stringent conditions, the Hong Kong Stock Exchange has gathered thousands of listed companies, basically absorbing most of the new-generation enterprises in the Asia-Pacific region and nearby Oceania, because although the conditions are much higher than in other places, raising funds and realizing capital here is far superior to stock markets elsewhere.
Here, no matter how large the company, there's no worry about insufficient funding. The capital here connects to the entire 'Bright Sword' world, and as long as there are worthwhile investment targets, they will be sought after by funds.
Due to the free flow of capital, it is one of the most favored places for international capital, alongside Mist Capital (London) and New York, known as the world's three major financial centers.
The majority of companies listed here are from Dongda. Since the mid-1950s, billions of US dollars have been raised annually here to develop Dongda's various industries, greatly alleviating the initial capital investment problems for Dongda's enterprises.
This has indirectly become a wing for Dongda's industrial take-off. Of course, Dongda's listed companies have also developed rapidly, with most achieving tenfold or even twentyfold growth, bringing investors generous dividend returns and stock price appreciation.
The flexible agreement Dongda reached with John Bull (Britain) gave this Oriental Pearl a special open port status, thereby ensuring the seamless integration of funds from the 'Bright Sword' world with Dongda through this port city. The first companies to prosper were mainly shipping and freight companies.
Including the Zhang family in mainland Dongda and the Chen family in Nanyang, these shipping giants, after completing their early accumulation of capital, transformed their companies into independent listed enterprises through listing in Hong Kong, continuously expanding their fleets through stock market financing, thereby nearly monopolizing the Asia-Pacific maritime market and occupying a large share of East-West trade shipping.
It can be said that during Dongda's great development in the 1950s, the Hong Kong stock market provided Dongda with the much-needed tens of billions of US dollars in financial support.
It was precisely the immense success of Hong Kong's financial development that led to the idea within Dongda of establishing a second stock exchange.
"Old Brother Ren, we've discussed a new plan to build another stock exchange within Dongda. See if it's suitable."
Chief of Staff Ye brought a simple plan for the construction of a new stock exchange to Ren Zhong.
Regarding this area of knowledge, Chief of Staff Ye sought Ren Zhong's opinion extensively during the development and standardization process of the Hong Kong Stock Exchange, transforming it from a chaotic financial market dominated by speculation into a regular and orderly one of the world's largest financial markets.
This laid a solid foundation for Hong Kong's early return and development, building this Oriental Pearl into a true bridge for East-West economic and trade exchanges, far more successful than under John Bull.
It can be said that it is even more prominent than Hong Kong in the main world.
After all, in the 'Bright Sword' world, John Bull and Dongda, after a brief estrangement after the war, quickly established a partnership through cooperation in agriculture, Rolls-Royce, and other fields. Both sides have gained huge benefits from the cooperation. The current Airbus Aviation Group has become a highly sought-after entity that all European countries are vying to join.
For the sake of expanding the European aviation market, Dongda Yandu Aviation Industry and Rolls-Royce, the two major shareholders of Airbus Aviation Group, are now negotiating how to list Airbus Aviation Group to promote the accession of European countries to this world's top five aviation group. The biggest controversy now is whether to list on the Mist Capital (London) financial market or the Hong Kong financial market.
After all, this is probably the largest financial financing activity in the 'Bright Sword' world in the last decade, with significant influence on the financial markets of both places.
It can even be said to be a major bargaining chip in the competition between Mist Capital (London) and Hong Kong for financial dominance. As for the final result, the two sides are still coordinating.
The development history of the Hong Kong financial market precisely illustrates the success of Ren Zhong's decision to define Hong Kong as an international free financial port.
Therefore, although Ren Zhong is ostensibly a leading figure in Dongda's technology sector, it does not obscure the brilliance of his equally important position in Dongda's financial circles.
Ren Zhong took the plan from Chief of Staff Ye and briefly glanced through it. Although the plan was simple, with only a dozen pages of introductory content, most of the rules and ideas came from a replica of the Hong Kong Stock Exchange, except that the trading venue and funds were almost entirely from within Dongda.
The reason for not saying 'all' is because in the rules of this stock exchange, the entry of foreign capital into this market is limited to funds from Hong Kong investment funds, which are eligible to declare a certain amount each year and enter the exchange to open accounts and trade stocks at a fixed exchange rate between the domestic currency and the US dollar.
Besides this, the securities users restricted by this exchange are domestic legal entities and adult users in Dongda.
In terms of fund management, Ren Zhong's trustee bank plan for the Hong Kong Stock Exchange, as well as the securities dealer agency trading and on-site trading 'red vest' seat system, were introduced, basically aligning with most of the rules of modern stock exchanges.
Unlike the Hong Kong Stock Exchange, the requirements for listed companies have been significantly lowered. The requirements for a company's revenue are an average of over 30 million for three consecutive years, profits exceeding 5 million, and an average annual growth rate reaching double digits. Relatively speaking, after a large number of high-quality domestic enterprises have listed in Hong Kong, the remaining growth-oriented enterprises now also have the opportunity to obtain funding through this new stock exchange.
In Ren Zhong's view, this design is equivalent to the domestic Growth Enterprise Market, but without the restriction that only high-tech enterprises can be listed.
In terms of delisting, several rigid delisting conditions have also been introduced:
Continuous low price: If a company's stock price is lower than 1 yuan for each of the 30 consecutive trading days, the exchange has the right to require the company to delist.
Continuous losses: If a company has audited cumulative losses for three consecutive fiscal years, and the company's shareholders' equity is lower than 50% of the company's initial listing value, the exchange has the right to require the company to delist.
Failure to disclose financial reports on time: If a company fails to disclose its financial report within the prescribed time, the exchange has the right to suspend trading of the company's stock and require the company to correct it within a prescribed period. If the company fails to correct it within the prescribed period, the exchange has the right to require the company to delist.
Serious violations: If a company has serious violations, such as financial fraud, insider trading, etc., the exchange has the right to force the company to delist.
Insufficient number of publicly traded shares: If a company's publicly traded shares are less than 25% of the total share capital for 24 consecutive months, the exchange has the right to force the company to delist.
Through these mandatory rigid delisting conditions, companies with poor fundamentals, insider trading, and financial fraud are directly persuaded to withdraw.
In this regard, the rules of the Dongda mainland stock exchange are consistent.
“I personally agree with opening another stock exchange in the mainland. With the current domestic development and accumulation, we already have a relatively affluent class and a group of private entrepreneurs. In terms of total amount, the amount of capital accumulated in society is already very large. Our previous informal financing and equity participation model for developing enterprises lacks a formal trading and realization channel, which is indeed a bit unsuitable for economic development under the current conditions,” Ren Zhong said to Staff Officer Ye after reading it.
In the past, enterprises often carried out various forms of financing, the largest of which was the issuance of various bonds. Dongda's infrastructure construction everywhere is inseparable from the shadow of bond issuance.
“However, our system should be more stringent in the review of company listings, using various means to confirm the listing materials, especially the issue of financial fraud. Not only should there be lifelong accountability, but there should also be specific clauses to restrict the openness, fairness, and impartiality of the review of listed companies. For domestic enterprises, we must verify from several official formal channels, including the local social insurance payment registration, tax situation, and the accounting of the company's actual inventory data. We must combine the use of social third-party audits with spot checks of listing audits to conduct a comprehensive verification.” Ren Zhong hated the matter of company fraud, so he especially emphasized this aspect.
Ren Zhong's view on stock market fraud is zero tolerance and lifelong accountability, so that stock market listed companies and third-party audit institutions, as long as fraudulent behavior is discovered, will be immediately investigated, and all relevant responsible persons will be subject to a lifelong ban from the securities market. As for the company's major shareholders and legal representatives, they will be treated equally, not only with a lifelong ban from the securities market, but also included in the list of untrustworthy persons in financial institutions, with a comprehensive ban on their financial financing.
Ren Zhong felt that even if this would stifle a group of entrepreneurial talents, he would never sympathize with or need such unethical entrepreneurs.
In the huge melting pot of the securities market, if the rules cannot severely punish those who engage in fraud and speculation, then the future financial market will be full of chaos. In this regard, Ren Zhong can learn many lessons from the stock market development history of many countries in the main world!
Those bloody lessons all illustrate that under the drive of huge financial interests, human nature cannot withstand the test at all, and only by severely cracking down can these chaos be curbed.
Staff Officer Ye attached great importance to Ren Zhong's opinions, and while listening to Ren Zhong's opinions, he proposed that Ren Zhong's side provide some reference suggestions and opinions in this regard, and directly incorporate these contents into the draft in the future exchange.
This matter is not a trivial matter, and everyone hopes to improve the plan as much as possible before opening up this market.
In fact, although the Hong Kong Stock Exchange seems to have developed relatively smoothly to the present, there have been many ups and downs during the more than ten years of development after the takeover, and even major events such as the temporary closure of the entire market have occurred. Fraud and insider trading are not uncommon. Fortunately, the system was relatively complete from the beginning, and once discovered, severe blows were launched to forcibly suppress these crooked ways.
In addition, a large number of Dongda's high-quality enterprises are the backbone of the Hong Kong Stock Exchange, and investors as a whole have obtained considerable returns by investing in the Hong Kong stock market. Therefore, in the development history of the Hong Kong Stock Exchange, a large growth rate has been maintained every year, attracting a large amount of funds from the Liangjian world, and indirectly entering the industrial development and construction boom of Dongda.
Now, the main purpose of the Dongda domestic stock exchange is to activate the accumulated funds in the country for more than ten years. Although from the perspective of per capita data, Dongda's domestic funds do not seem to be anything, but in terms of the actual bank savings balance, Dongda is already a veritable top five financial power in the world!
Under the condition of more than 500 billion GDP, savings have exceeded 300 billion, although it is not worth mentioning in terms of per capita, but in terms of total amount, this is already a total of hundreds of billions of US dollars in funds.
The development of the domestic capital market already has certain financial foundation conditions. In addition, domestic telephones have begun to become popular in cities, and the penetration rate of household telephone users in cities above the prefecture level has exceeded 30%. Under the condition of no Internet, the objective trading conditions for remote transactions relying on telephone orders are basically available.
As Ren Zhong and Staff Officer Ye perfected the entire plan, the Modu Stock Exchange officially opened!