Chapter 313 Wealth Statistics in 1962

Chapter 313 Wealth Statistics in 1962

Chapter 313 Wealth Statistics in 1962
The next day, on January 1, Changxing Real Estate submitted an application to the Hong Kong government to participate in the auction and paid a deposit of HK$16 million.

After receiving the accurate reply, Yang Wendong felt relieved and then came to the 16th floor of Changxing Group, which is the location of the financial department of the head office.

"Sister Wang." After seeing Wang Fengzhi, the group's financial director, Yang Wendong greeted her with a smile.

No matter how big the business is, the boss has to give the person in charge of finance some face. Anyone who has done business understands this. Even if there is no illegal behavior, the financial manager can be said to be the core of the company.

When Wang Fengzhi saw the boss coming, she immediately stood up to greet him and said with a smile, "Why did Mr. Yang come in person?"

"The holiday is coming soon, so I came to your place to take a look at the group's financial situation last year." Yang Wendong said with a smile.

The Chinese New Year is very early this year, with the 24th being the Spring Festival. For welfare considerations, Changxing Group will have a few days off in advance, except for some workers in the factory who are willing to exchange for double or triple wages.

There is no other way. The factory cannot stop working. The employees may not be happy about this, especially since they can take appropriate time off later.

Wang Fengzhi smiled and said, "Okay, we have started compiling the total financial data since the end of last year, and it is now out. I am going to see you in the next two days."

Yang Wendong said, "That's a coincidence. I've seen it earlier, so everyone can prepare for the New Year with peace of mind. In the last two days of work, you can take a proper rest and think about the work plan for next year. It's okay if you don't need to do anything."

In his previous life, Yang Wendong was also a worker and had come into contact with Douyin. Naturally, Yang Wendong understood the mentality of the night watchmen.

"Okay, thank you, Mr. Yang." After Wang Fengzhi finished speaking, she took some information from the side and said, "Mr. Yang, these are the sorted data. Currently, several core businesses of Changxing Group are here.

They are Changxing Industry, Changxing Real Estate, Changxing Shipping, Changxing Media, Carrefour, Honor Electronics, Changxing Culture, Watsons; and several large financial investments that you have listed under the head office group. "

"Well, don't worry about the investment. Just mark the returns. Basically, these will not be cashed out in the short term." Yang Wendong said, looking at the information.

Changxing Group now also has some investments in Hong Kong and around Asia, such as China Motor Bus in Hong Kong, Formosa Plastics Group in Taiwan, etc. These will all be long-term assets.

In addition, there are some overseas investments that do not need to be announced to the public, such as Walmart.

The financial industry is still just testing the waters and the scale is not very large. When the time is right, a corresponding first-level subsidiary will be established.

"Okay." Wang Fengzhi continued, "Then Mr. Yang, the first document you open is the operating data of Changxing Industrial last year, with a total turnover of 4.4 million Hong Kong dollars.

Currently, Changxing Industrial's core products are sticky notes, suitcases and sticky hooks, which account for 85% of the group's turnover, while rotary mops and sticky mouse boards account for 15% of sales.

Yang Wendong asked: "Spin mops don't sell very well, is it because they are inconvenient to transport?"

Wang Fengzhi said: "Yes, its transportation cost is too high. Things are large and irregular, and they are relatively cheap. In addition, there are a lot of piracy in various places. We have gradually adopted the model of authorizing a local partner to operate;

So although the turnover is not high, the profit margin is still good. Last year's net profit was HK$520 million."

"It can only be considered pretty good. With so many pirated products, the genuine license can't be sold at a high price." Yang Wendong took a look at the table and saw that the licensing fees for multiple countries were not very high.

Wang Fengzhi agreed and said, "Yes, even the local bosses in many countries cannot suppress local piracy. Otherwise, our profits could easily increase several times."

Yang Wendong smiled and said, "If we really put an end to piracy, our profits will more than double tenfold."

If living in an ideal legal world, the time traveler could easily become the world's richest man, even stronger than the second to tenth people combined.

But in reality, the wealth that patents can bring is limited. Even Western countries will not allow patent inventors to form too strong a monopoly.

Unless it is a monopoly at a very high-tech level or a special model like the Internet that bundles user habits, such as Microsoft, Google, Apple, etc., but this is actually because of Uncle Sam behind them, otherwise these companies would have been overthrown by many countries long ago.

Wang Fengzhi went on to say: “It’s the same with mouse traps, fly traps, and cockroach traps. Piracy is totally out of control, so we can only rely on our own low-cost advantage in producing glue to compete overseas.

Fortunately, the shipping cost of mouse traps is very low, which makes them very competitive overseas. They also enjoy tariff concessions in Commonwealth countries and the United States. Therefore, their turnover has reached HK$3000 million, and their profit is about HK$400 million.”

"Well, the mouse trap is the group's first product. The scale is not small, and it also creates the most jobs." Yang Wendong nodded and said, "I will discuss this with Lao Wei later. We will also work hard to reduce costs and hire more people."

Among Changxing Industrial's main products, the mouse trap is not ranked high, but the scale of employment it generates is the largest.

Because sticky notes and suitcases mainly rely on equipment for production, workers usually cooperate with the equipment; but although mouse traps also use some equipment, the core is still manual mode.

With Hong Kong’s labor costs today, or even in ten years’ time, the simpler the product, the more cost-effective it is to use labor.

It would be more beneficial to oneself if it could create a large number of jobs and make some money at the same time.

Wang Fengzhi thought for a while and said: "For products such as mousetrap, the core costs are property, labor, glue and paper. We own the property, and labor in Hong Kong is not expensive, so there is no problem with these two points.

Among the material costs, we can produce glue ourselves, and the cost is much lower than buying it from overseas, so the only thing left is paper.”

"In fact, I have wanted to make paper myself for a long time. The main cost of sticky notes is also paper." Yang Wendong nodded and said, "It's just that papermaking is too polluting and very water-consuming. It's impossible to do it in Hong Kong now."

After the successful development of his core products, Yang Wendong has always wanted to reduce costs through industrial chain, just like BYD in his previous life.

Currently, Changxing Group’s main raw materials are plastic, glue and paper;

The plastics industry involves petrochemicals and chemical engineering. Since we couldn't do it ourselves, we participated in it indirectly by investing in the future plastics tycoon Wang Yongqing, and we even produced our own glue.

But paper production, let alone technology, can be bought with money, but pollution and water are difficult to solve. Wang Fengzhi nodded and said, "It's still unknown when the drought in Hong Kong will end. It's really not possible to open a factory that consumes a lot of water. But Mr. Yang, we can actually consider investing in a paper mill in Taiwan."

"Taiwan?" Yang Wendong raised his eyebrows. In fact, he had thought about it too.

Wang Fengzhi added: "Yes, judging from Changxing Industrial's purchase records, a lot of paper comes from a Yongfeng Paper Mill in Taiwan. Taiwan also has a papermaking industry.
Besides, there is not much water shortage in Taiwan. If there is pollution, it is fine as long as it complies with the regulations. It is impossible not to operate an industry that does not pollute.'

"Okay, I'll ask someone to investigate after the New Year." Yang Wendong nodded.

Although the development of post-it notes has not reached its limit, the growth rate is not as fast as in the first few years. As the market is growing slowly, we need to find ways to optimize the industrial chain. The best way is to move step by step to the front end and become self-sustaining.

"I'm just suggesting it." Wang Fengzhi added, "Last year, the total turnover of Post-it Notes was HK$1.3 million, and the total profit was HK$3800 million."

"1.3 million?" Yang Wendong took another look at the financial report. The total sales volume was 14.1 billion copies.

Today's global population is approximately 30 billion. Excluding the Warsaw Pact, Africa, parts of Asia, South America and other regions, the number of people with a little bit of purchasing power is estimated to be between 15 billion and 18 billion.

Among these populations, the ratio of office workers may be as high as 30% in economically prosperous areas, and may be as high as 5% in economically disadvantaged areas. The exact number cannot be counted, but it is estimated that the total number of office workers or some workers who may use sticky notes worldwide is about 3 to 4 million.

Based on this number, an average of 3 to 4 copies per person per year is already pretty good.

Of course, this is just an average, and there are definitely many people who haven’t used it, but we also have to take into account factors such as piracy.

Wang Fengzhi replied: "Yes, the profit margin is a bit low, also because of the extensive promotion in Europe and the United States, which cost about 1000 million Hong Kong dollars in operating costs, which was shared by local dealers."

"It's normal. It's impossible to maintain high interest rates all the time. It's normal to reduce it appropriately for the sake of market share." Yang Wendong nodded and said.

It is impossible to maintain high profits even with patents, otherwise there will be more piracy, and even in some industries, some countries will force you to return the money.

The only things that can be ignored are cutting-edge high-tech products or administrative monopoly industries.
Wang Fengzhi continued, "Currently, Changxing Industrial's highest-grossing product is suitcases. Last year, a total of 860 million suitcases were sold, with an average factory export price of HK$19 per unit and a total turnover of HK$1.64 million.
But the net profit was only HK$2600 million, not as good as Post-it Notes, mainly because there were more and more overseas competing brands and we couldn’t maintain the profit margins we had in 60 and 61.”

"Yeah." Yang Wendong said, "But it's a bit difficult to reduce the cost of suitcases. We basically produce half of our own plastics. It's impossible for us to enter the oil industry."

Wang Fengzhi nodded and said, "Yes, in fact, shipping costs are also an important factor. Many of our competitors are local brands in Europe and the United States. Although their labor costs are expensive, transportation is much more convenient."

Yang Wendong thought for a moment and said, "Sea transportation may be better when containers become more popular in Hong Kong."

The existence of containers is no longer a secret to many people, and naturally many people within Changxing Group know about it.

What hinders the popularization of containers is not cognition, but large-scale infrastructure investment and the interest chain of the old era.

Wang Fengzhi added: "The only thing left is the sticky hook. Last year's turnover was 5900 million Hong Kong dollars, but the profit was only 892 million. It is the same as the mouse trap. There are too many pirated copies. The product is small and can be made in small workshops, so the competition is very fierce.

We have achieved this result by relying on patents and various overseas channels, but we cannot raise the price and can only guarantee a profit of a dozen points.”

Yang Wendong looked at the numbers and said, "For such a small thing to be sold on such a large scale, a profit of more than ten points is already quite good, especially when piracy is rampant."

The profit margins of large and small businesses cannot be directly compared.

In the past, some small and micro enterprises might have a profit of 30 points a year, but technology giants like Apple might only have a profit margin of just over 30%, and international automobile giants like Toyota might only have a profit margin of just over 10 points. It would be considered very good if they could reach 15%.

Normally, the larger the scale of a business, the more difficult it is to maintain high profits, except for Internet or software companies.

The reason why we make our own Post-it notes is that our end customers are enterprises. Such enterprises generally have to pay attention to patents, so their profit margins are high. The reason why we make our own trolley cases is that our products are large and there is less competition.

It is too easy for others to copy and pirate products such as sticky hooks, rotary mops, and mouse traps.

Wang Fengzhi added: "There are also Rubik's Cube, as well as toys and kitchen supplies launched by Changxing Industrial itself. With our own channels, our turnover last year was 1860 million and our profit was 230 million."

"Not bad." Yang Wendong smiled with satisfaction.

In the past two years, Changxing Industrial has also launched many kitchen products. The simplest ones are plastic chopsticks, spoons, containers and utensils, etc., which are all common commodities. With the help of its strong channel capabilities, it can also make a little money.

In fact, this is enough for the time being. It is not so easy to come up with a hit product. Under normal circumstances, you have to develop these inconspicuous small commodities. Only when the quantity is large enough, it is possible to launch a hit product by chance, and the company itself may not even know about it before the launch.

Only time travelers can know the future and launch products that are sure to be hits.

Wang Fengzhi concluded: "According to the above data, the total net profit of Changxing Industrial in 1962 was HK$8513 million.

However, this figure does not include the repayment of loans and the funds you transferred from Changxing Industrial."

Yang Wendong nodded and said, "I know that the group will strictly separate the accounts of each business subsidiary in the future. Whether it is mortgaged or transferred funds, it will be considered as debt.

In the future, other subsidiaries will repay or transfer their debts, and the interest will be settled normally. We just need to wait until the company helped by Changxing Industrial can operate normally and get back on track. "

The core reason why Changxing Real Estate and Changxing Shipping can develop rapidly is the strong profitability of Changxing Industrial, otherwise banks such as HSBC and Hang Seng would not have given so many loans.

But once the operations are normal in the future, you will be responsible for these funds and loans.

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(End of this chapter)