If you spend any time in Hong Kong, you've probably seen the blue and cream buses of Citybus or the orange and white of NWFB (now merged under Bravo Transport). But if you look at the skyline of North Point or Chai Wan, you’ll see the ghost of a company that once ruled the roads and now basically exists as a giant pile of cash and real estate. The China Motor Bus Company—or CMB—is a case study in how to lose a monopoly but win at the game of capitalism.
It’s a strange story. Honestly, it’s one of those "only in Hong Kong" situations where a transportation titan gets its license yanked by the government and somehow ends up richer because it doesn’t have to deal with the headache of actually running buses anymore.
The Rise and Stubbornness of CMB
Founded in 1924 by Ngan Shing-kwan, China Motor Bus Company wasn't just a business; it was a family dynasty. For decades, it held the exclusive franchise to run bus services on Hong Kong Island. If you lived in Central, Wan Chai, or Aberdeen between the 1930s and the 1990s, you rode a CMB bus. Period.
But here is the thing: the service was notoriously bad. By the 1980s, the Ngan family was famous for being frugal to a fault. They didn't like buying new buses. They didn't like installing air conditioning when the rest of the city was sweltering. While their competitor across the harbor, KMB, was modernizing and keeping passengers happy, CMB felt like a relic.
You’d see these aging, rattling double-deckers struggling up the steep hills of Hong Kong Island, often with drivers who were just as grumpy as the gearboxes they were wrestling with.
Public frustration eventually boiled over. It wasn’t just a few complaints to the transport department; it was a genuine city-wide mood. The government started taking chunks of their routes away in the early 90s, giving them to the upstart Citybus. But the Ngan family stayed stubborn. They didn't think the government would actually go through with the nuclear option.
They were wrong.
In 1998, the Hong Kong government did something almost unheard of in a pro-business environment: they refused to renew the franchise. Overnight, the China Motor Bus Company was out of the bus business.
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From Exhaust Fumes to Luxury Real Estate
Most companies would have folded. If your name is "China Motor Bus Company" and you no longer own any buses, what are you?
Well, it turns out they were a real estate developer in disguise.
Because CMB had been around since the 1920s, they owned massive amounts of land. They owned bus depots in prime locations like North Point and Wong Chuk Hang. In Hong Kong, land is more valuable than gold. While the public was cheering the arrival of the new New World First Bus (NWFB) fleet, the board at CMB was probably looking at their balance sheet and smiling.
They shifted focus immediately. The old bus depots were cleared away to make room for massive residential and commercial towers.
The Island Lodge Transformation
One of the most prominent examples of this pivot is Island Lodge in North Point. What used to be a greasy, noisy maintenance yard for double-deckers is now a high-end residential tower. They didn't just sell the land; they partnered with major developers like Swire Properties.
This is where the business strategy gets fascinating. CMB effectively became a "cash box" company. They have very few employees. They don't have to worry about fuel prices, labor strikes, or mechanical failures. They just collect rent and dividends from their property portfolio, which includes assets as far away as London.
Why the Ngan Family Still Matters
You can't talk about China Motor Bus Company without talking about the Ngan family, specifically Ngan Kit-ling. She was known for being an incredibly tough negotiator. Even after the bus franchise was lost, she fought tooth and nail in the courts and the boardroom to maximize the value of the remaining assets.
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There’s a legendary aura around the CMB annual general meetings. They aren't the polished, corporate affairs you see with tech startups. They are often described as old-school, slightly chaotic, and filled with long-term shareholders who have held the stock for forty years.
The Mystery of the Remaining Bus
Believe it or not, the "Motor Bus" part of the name isn't entirely a lie. For a long time after 1998, the company maintained a single, non-franchised bus route. It was a free shuttle service that ran between North Point and the Island Place office complex.
It was a weird, tiny vestige of their former empire. Seeing that single blue bus was like seeing a living dinosaur. It served no real commercial purpose other than perhaps keeping the "Bus" in their name legally relevant or simply out of a sense of tradition.
What Investors Get Wrong
A lot of people look at CMB and think it's a "dead" company because they don't see the buses on the road. That's a mistake.
From a purely financial perspective, the China Motor Bus Company is a masterclass in asset play. They traded a high-maintenance, low-margin service business for a low-maintenance, high-margin property business.
- Liquidity: They sit on a mountain of cash.
- Dividends: They have historically paid out massive special dividends when they sell off assets.
- Low Overhead: They don't need a thousand drivers or a fleet of mechanics.
It’s a "lazy" company in the best possible way for a shareholder who just wants steady returns without the volatility of the broader market.
The London Connection
People often forget that CMB isn't just a Hong Kong story. To diversify away from the local market, they moved into the UK. They own office buildings in Central London, such as those in the Albany House area.
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This move saved them during various Hong Kong property slumps. It’s a classic hedge. While the world was watching the 1997 handover and the subsequent changes in Hong Kong’s transport landscape, CMB was quietly buying up London brick and mortar.
The Modern Reality
Today, the company is listed on the Hong Kong Stock Exchange (Stock Code: 0026). If you look at the stock chart, it doesn't look like a transportation company. It looks like a slow-moving, heavy-duty investment vehicle.
The service-oriented public might still remember them with a bit of a grudge—the "no A/C" days were rough—but the business community views them with a sort of begrudging respect. They survived the loss of their core identity and came out richer on the other side.
Actionable Insights for the Curious
If you are looking to understand how the Hong Kong economy actually works, stop looking at the flashy tech firms and start looking at the old-line companies like China Motor Bus Company.
Watch the Land Use: Whenever you see an old industrial site in Hong Kong being rezoned for residential use, check the history. There’s a high chance it was once a depot or warehouse for an old utility company. The money isn't in the service; it's in the soil.
Value over Brand: CMB proves that a "bad" brand (hated bus service) doesn't mean a bad investment. Separating the operational performance from the underlying asset value is key for any serious investor.
The Power of Minority Stakes: Much of CMB's current wealth comes from joint ventures. They didn't try to build the skyscrapers themselves; they provided the land and let experts like Swire do the heavy lifting. This is a vital lesson in knowing your limitations.
Check the Annual Reports: If you want a trip down memory lane that is also a financial education, read through their filings. They are surprisingly blunt and offer a window into a style of management that is rapidly disappearing from the world.
The China Motor Bus Company is a reminder that in the world of business, what you do is often less important than what you own. They started by moving people, but they ended by owning the places where those people live and work. It's not a romantic story, but it's a very profitable one.