Chapter 261 Wealth Statistics in 1961

Chapter 261 Wealth Statistics in 1961

Chapter 261 Wealth Statistics in 1961
"It's a good business." Yang Wendong agreed and said, "Just go for it. The demand for glue and the market potential are huge."

In human society, the demand for glue is almost eternal. No one can live without it, and the industrial and construction fields need a variety of different glues.

Since we have such a factory, R&D team, and stable customers, we naturally have to focus on developing this field. Even our other industries in the future will have demand for glue.

"Okay, many countries in Asia cannot produce glue yet, this is our opportunity." Wei Zetao smiled and said, "In the plastics division, we produced a total of 260 million suitcases last year, but the main production capacity is actually produced by the previous Tsim Sha Tsui factory.

This year, the daily production capacity of the Kwun Tong Industrial Park has exceeded 1 units, and by the end of the year it is estimated to exceed 2 units. Together with the factory in Tsim Sha Tsui, the annual production plan is about 700 million units.

"What about the piracy issue?" Yang Wendong asked again.

Wei Zetao said: "There are not many pirated products. The production of this kind of trolley case requires large-scale blow molding equipment. After production, the cost of transportation is very high. The terminal sales industry needs to be placed in a good location, so it is quite difficult.

But now there are also many companies that have circumvented our patents and designed different structures that can achieve almost the same effect. This has led to fierce market competition, and it is estimated that the competition will be even greater in the future."

"So it becomes a channel issue again," Yang Wendong asked.

Wei Zetao nodded and said, "Yes, but the demand for trolley cases is huge, and the market is still in its growth stage, so there shouldn't be much of a problem in the next two years;

But in terms of price, we may need to make some concessions and also need to place advertisements to compete for customers.”

"Well, these are also necessary for normal business." Yang Wendong nodded and said, "Since several major products need advertising, let's build the Deli brand together."

Not every creative product can obtain exclusive monopoly rights, otherwise the company that invented the trolley case would have become a giant company long ago.

The more complex the product, the easier it is for other companies to bypass the patent, so the inventor has no way to obtain exclusive benefits. In fact, the patent laws of some countries will not recognize some necessary patents, forcing patent holders to publicly license them at low prices.

Patents are a "legal" means set up by rogue countries to protect their own interests, but sometimes in order to avoid being "rogue" themselves, a loophole is left.

But no matter what, the first person to try something new will always get a big piece of the cake.

"Okay." Wei Zetao agreed and said, "For the spin mop business in Asia, it is currently produced in Hong Kong and then shipped to other countries by sea.

Last year we produced a total of 360 million sets of spin mops, with a total value of around HK$2000 million.”

"Isn't this piracy problem very serious?" Yang Wendong asked again.

"Yes." Wei Zetao nodded. This needed no further explanation, everyone understood it.

Yang Wendong nodded and said, "Piracy will be an eternal problem, and it may not even be solved in our lifetime. However, we still have to develop. We will continue to do our own thing and don't need to worry too much about it."

Even Cook, the CEO of Apple, a giant with a market value of trillions of dollars in the past, could only smile helplessly when he saw the Apple IPAD in Huaqiangbei. There was nothing he could do.

Because it is impossible to stop this industry forcefully, the only way is to develop brand quality and technology. Changxing Industry itself produces creative products with low technical content, so it can only go the brand promotion route.

As long as the brand is promoted a lot, people who buy the product will subconsciously buy this brand, especially in places with good economy. People often don’t care too much about a small price difference, but instead pay more attention to the brand.

In the first few years of starting a business, because our production capacity was always insufficient and the external demand was higher, we would definitely not carry out too much brand advertising, as that would only aggravate the insufficient production capacity. Now that the production capacity problem is gradually being solved, we are entering the next cycle.

"Yes, as long as the brand is established, things will be much better," said Wei Zetao.

"Hmm," Yang Wendong continued, "Last year, the total sales of the plastic business exceeded that of the viscose business?"

"Yes, a little more, but not much. However, the profit is still not as good as that of sticky notes." Wei Zetao replied: "The production capacity of Kwun Tong Industrial Park has increased dramatically this year. I think the plastic business will become the core business of our Changxing Industrial this year."

“Don’t look down on sticky notes. We haven’t promoted this thing on a large scale yet, so it still has great potential,” Yang Wendong said with a smile.

In its past life, Post-it Notes were one of 3M’s five major industries, with annual sales exceeding $5 billion.

However, that was in the 80s, twenty years later than now, so the calculation cannot be equivalent. Moreover, nowadays, the company's own promotion still needs to rely on various channel dealers, which is far inferior to the industrial giant 3M.

But no matter what, the sales volume cannot stop at less than 100 million Hong Kong dollars a year. The current sales volume is actually more like a market obtained without much investment in publicity. It is estimated that many people still don’t know about this thing.

Wei Zetao said with a smile: "Mr. Yang is right. There is indeed still a lot of room for improvement in sticky notes. However, the plastics industry involves many products and will definitely not let us down."

"Well, the bigger the better." Yang Wendong nodded.

According to this data, the total turnover of the two core businesses last year was almost HK$2 million.

As for profits, the finance department has not yet fully calculated them, but there are rough figures, and the net profit is around HK$5500 million.

This profit alone is probably second only to the old foreign companies such as Jardine Matheson, Swire, and Wheelock in Hong Kong;
Of course, the scale of the industry is still far from comparable.

Wei Zetao paused and continued, "Changxing Industrial also has some small businesses that were invented within our company and then developed into the market. The total turnover is about HK$150 million."

He was a little embarrassed at this time. The core products of the entire Changxing Industrial were provided by the boss, and the new products developed by many of their internal technical personnel were less than one percent of the company's size.

This is because Changxing Industrial itself has a lot of channel resources, plus strong production capacity, etc. If it were an independent company, these new products would not make much money even if they could.

Yang Wendong smiled and said, "It's OK. As long as there is progress, we can continue research and development."

The research and development of many large companies and even scientists is inherently random. It is possible that only one out of multiple studies will be successful, and even an accidental discovery may be successful.

For a team without direction, being able to find its own direction and then produce products is already a huge improvement.

"Thank you, Mr. Yang." Wei Zetao said, "Ladies and Gentlemen, these are the main businesses of my Changxing Industrial."

In fact, there are also some small businesses, such as the joint venture interests between Changxing Industry and its joint venture partners, but there are not many of these, so there is no need to say more here.

"Evergreen Industrial has made great progress last year," Yang Wendong said, "so I hope we can continue to make progress this year. I not only want Evergreen Industrial to be the largest factory in Hong Kong, but also to be the largest in Asia, or at least one of the largest."

After traveling through time for a few years, he became one of the richest men in Hong Kong, and basically there would be no problem. When the real estate market bottomed out in 66, the real estate industry alone would easily surpass the four major Chinese families in the future.

It is not difficult to become a shipping magnate. Even if you are not as good as Bao Yugang, you should be at the same level. It should not be difficult to become one of the top ten shipping magnates in the world.

The industrial sector is full of challenges and is also the most fulfilling career. Especially now that the Chinese community is in poor economic straits, there is an urgent need for factories that can create a large number of jobs to help hundreds of thousands of Chinese people escape the most basic poverty problem.

If he can do this, his life achievements will be higher.

When rich people get older, many of them seek fame, and perhaps this is the reason.

After listening to this, Wei Zetao said, "Don't worry, Mr. Yang, we will definitely do our best."

"Okay." Yang Wendong nodded, then looked at Zheng Zhijie and asked, "Old Zheng, Changxing Real Estate is the second largest business of our group. Can you also give us a summary of last year's performance?"

"Yes, Mr. Yang." Zheng Zhijie also said: "Changxing Real Estate now has two main businesses, one is the real estate development of residential communities, and the other is real estate investment.

Last year, Changxing Real Estate developed a total of 6 residential communities, with a total sales area of ​​more than 340 million square feet. Because they are all on Hong Kong Island, the price per square foot is around HK$30.

“That’s close to 100 million in sales?” Yang Wendong said with a smile.

Zheng Zhijie said: "Yes, but this is the terminal's turnover, which is actually recycled. The funds from the previous project will also be used in the next project.

Moreover, our own funds are less than 20% of the total, and most of the funds are from pre-sale properties and banks.”

"Yeah, I know." Yang Wendong nodded.

The real estate industry is very special. Because there is collateral, banks are more willing to lend money, at least much better than shipping.

The special feature of pre-sale properties is that leverage is used to the extreme.

It is said that many real estate players with a strong gambling nature only use 100,000 yuan, and then use some means, such as "building good" relationships with banks, to obtain loans of millions, and then obtain higher funds through pre-sale properties.

If everything goes well, you can leverage three or four million in funds and ultimately make a profit of hundreds of thousands, while the initial investment is only one hundred thousand. The profit can be said to be seven or eight times, or even ten times.

Changxing Real Estate naturally uses the same routine, but because the funds are large enough and the base is high, it is impossible to achieve such an extreme. It is generally controlled at around 15%. However, this is only for a single project. The capital utilization rate of multiple projects will be much higher.

In other words, of the 1500 million start-up funds for several projects, a large part was actually double-counted, and the actual investment might be only three to five million. As for the profit, it could probably be doubled or tripled, almost tens of millions of Hong Kong dollars.

The ratio may seem low compared to the turnover, but compared to the principal, it is absolutely a huge profit.

He then added: "Next year's real estate business will continue to develop high-end residential areas. In addition, we can try to select some commercial office buildings for development, and also sell the pre-sale properties to cash in."

The residential communities of Changxing Real Estate are all well-decorated and have good locations, so they are very popular among many middle-class citizens. This is also the reason why the company has developed so rapidly.

However, the high-end market is always limited, especially in the economic environment of the early 60s.

Therefore, real estate development also needs to find a larger market. Ordinary residential buildings are actually acceptable, but the competition is fierce, while commercial office buildings are much better.

Because many real estate developers in this era also like to hold their own properties, there are not many single-floor or even half-floor office buildings for sale, but there are many retail investors who want to buy, which is also a good market.

"Don't we increase our own capacity?" Zheng Zhijie asked.

Yang Wendong said: "Yes, you can just do the commercial real estate business as usual, and then let me know. If I find a suitable one, I will choose to hold it myself."

By 62, although housing prices had not yet reached their peak, it did not make much sense to own non-core high-quality properties at this time. It would be better to take advantage of the last frenzy in the real estate market, double the money in hand, and then wait until 66 to make another profit.

Although 66 was the beginning of the real estate crisis, the entire real estate market had actually begun to decline in early 65, which means there was still three years to go.

"Okay." Zheng Zhijie didn't ask any more questions. He also knew that his boss had very deep insights into the real estate market.

Then he said: "Changxing Real Estate's Changxing Property Company was established at the beginning of last year. We currently own 9 buildings in Hong Kong Island. Except for Changxing Building, Honghua Building and Jili Building, which we use ourselves, the others are rented out.

The current operating assets include 17 cinemas and Changxing Plaza.

In addition, there are various types of land and properties in Kwun Tong, totaling about 230 million square feet, but these properties are not valuable. Even though the emergence of Changxing Industrial Park has caused the housing prices in Kwun Tong to rise rapidly, the average price of our properties is only about 10 yuan per square foot. "

"This is not even as good as the land that was auctioned for the highest price last year." Yang Wendong said with a smile.

In the past, when Hong Kong's economy developed, although housing prices in Kowloon Peninsula were still lower than those in Hong Kong Island, the gap was not as big as it is now.

You have to know that ten years ago, unless it was necessary for business, normal people with some money would not live in Hong Kong Island. You can imagine how low the land price in Kowloon was.

It is because of the excessive influx of population in the past decade that Hong Kong Island can no longer accommodate it, so Hong Kong's big capital and the Hong Kong government began to promote the economy of the Kowloon Peninsula.

"Yes." Zheng Zhijie added: "In terms of price, it is still far behind. However, when we first acquired the land in Kwun Tong, the average price was only 6 to 7 yuan. In addition, we only used % of the funds. Even if we consider it as interest expenses, we have doubled our profit now."

The other people were also roughly calculating the profits in their minds. Profits were not discussed in this meeting, but a lot of information could be roughly calculated.

"Well, just continue to hold these properties for now." Yang Wendong nodded. He would not keep these lands. In two years, when housing prices reach their peak, he would sell them on a large scale, so that he could buy back an area several times the size in 66-67.

PS: Ask for monthly ticket

(End of this chapter)