The Rise of a Market Power: D’Long, 1996-2001
Little is publicly known about D’Long’s early years beyond rough details. The original parent company of the group, Xinjiang Delong Co., was formed in 1986 by four brothers: Tang Wanxin, Tang Wanli, Tang Wanping, and Tang Wanchuan. Tang Wanxin, the youngest of the brothers and CEO of the company, was the key strategist and apparently the only person with complete knowledge of D’Long’s operations; Tang Wanli served the number two position as chairman of the board. The company was originally involved in color film processing, but soon branched out into other fields.20 One of the firm’s first successful large-scale ventures came in 1994 with JJ’s Disco in Beijing, which reportedly yielded RMB 30 million in annual income. In 1992, two years after the creation of China’s first formal stock exchanges in Shanghai and Shenzhen, D’Long began investing in China’s stock market; by 2003, many people believed it to be the market’s single largest investor.21
D’Long’s rise as a stock market superpower began in October 1996, when it became the fourth- largest shareholder in Xinjiang Tunhe, a state owned cement company that had gone public three months earlier, by acquiring legal person shares from two affiliated SOEs.22 In 1998, D’Long increased its control over Tunhe from 10% to 40% by acquiring the company’s non-listed parent. Under D’Long’s control, Tunhe soon moved beyond cement to invest heavily in tomato paste, building new factories and acquiring many smaller firms in the industry.23 By 2003, the company had become one of the world’s largest manufacturers of tomato paste and had branched out into fruit juice and other areas. Its total revenues in 2003 were RMB 2.2 billion (USD 72 million), sixteen times larger than revenues in 1996. Despite a bear market in China’s stock markets after 2001, Tunhe’s stock price rose