Chapter 384: Changxing Shipping's Amazing Profits
Chapter 384: Changxing Shipping's Amazing Profits
"Plastic bags, we should have many competing companies, right?" Yang Wendong asked.
Wei Zetao nodded and said, “Yes, many large chemical companies have also produced polyethylene materials, which have different ingredients from ours and can also be used to make plastic bags;
However, they pursue high profits, so the selling price is very high, and some of them involve tariffs. Therefore, we still have an advantage in terms of cost, because the transportation cost of plastic bags is very low, unlike the various papers in the first business unit. "
"Okay, scale and self-control of the industrial chain are our advantages." Yang Wendong said with a smile: "We must make full use of this and occupy the global market."
"Yes." Wei Zetao nodded.
Yang Wendong asked again: "As for woven bags, although they cannot be compared with plastic bags in quantity, they are more practical and have higher value. I want this market more. Formosa Plastics will also expand its scale this year, and so will we. If Hong Kong is too late to produce, we can also consider moving production to Taiwan."
Today, the number of people employed by Changxing Group has reached 2, which is too high in Hong Kong, a city with a population of more than 300 million.
The previous industries have already established themselves, so they will naturally continue to be maintained, but newly expanded production capacity or new products can be considered to be placed elsewhere. This is also a necessary step for large groups to diversify their production sites, especially as some countries have advantages such as preferential import policies for Taiwan.
As for indirect real estate income, although this is important, with the current scale of Changxing Group and several real estate crises in the future, there are plenty of opportunities; and considering that Changxing Real Estate cannot invest too much in Hong Kong, it is also a good choice to transfer funds to Taiwan and benefit from the future real estate growth in Taiwan.
"Okay, this year Changxing Industry is also planning to build several factories in Taiwan." Wei Zetao said with a smile: "Many industries of the group will also invest in production in Taiwan to ensure greater production capacity."
"Okay." Yang Wendong nodded and asked, "What about your fourth business unit? The various gadgets developed by Changxing Industry?"
Like 3M, Changxing Industrial's main focus is various commodities that are useful in life, and the mainstream products are small items that make life more convenient. There are not many such items as trolley cases.
Wei Zetao said: "Currently, the fourth business unit has a large number of self-developed products, as many as dozens of them, and its total turnover last year was HK$2700 million."
"This is a very good data." Yang Wendong praised: "Just this alone makes it a large-scale enterprise in Hong Kong."
After all, he cannot be compared with the Prophet, who is such a cheat. All Yang Wendong can produce are the global best-sellers in his previous life. If he were an American company, then relying on his political advantages and winning over some American dignitaries, it would not be a problem to have annual sales of several hundred million US dollars.
As for other normal commodities, it is difficult to grow without special demand. Even for 3M, the performance of most of its products is very average.
Wei Zetao said awkwardly: "Mr. Yang, although this data is very good, it actually mainly relies on the channels established after the success of other business units. Otherwise, it would be difficult to achieve 1/10 of this result."
"Yes, channels are very important." Yang Wendong nodded and said, "But since we already have channels, we should make full use of them."
Many large companies actually only have one or two core products, and then use the channels of these products to develop other similar products because the channels are similar.
For example, the core of Coca-Cola is cola, but after the success of Coke, it became much easier to develop other beverages. Even the success of Sprite and Fanta depends on this channel. Otherwise, if you want to succeed by quality alone, it would be as difficult as climbing to the sky.
Wei Zetao nodded and said, "Yes, but we haven't developed any hit products yet."
"It's not easy to get a hit product. Don't think too much. Winning by volume is also an idea." Yang Wendong added: "Or rely on existing industries, improve technology and control the entire industry chain, and reduce costs. This is actually a more stable development idea for the company."
Business operations cannot rely on creative hits. Although some companies have succeeded by doing so, normally they still have to rely on channels, technology, quality, brand operations, etc. If these are stable, then if there is another hit product, it will be like adding wings to a tiger, but the opposite is not true.
"Understood, Mr. Yang." Wei Zetao said with a smile: "Mr. Yang, everyone, the above are the main achievements of Changxing Industry last year. There are also some other small businesses, which are not very successful, so I will not report them at this meeting;
Once all the financial data for last year is available, the relevant information will be submitted to the Group’s Finance Department and Mr. Yang.”
"Okay, Mr. Wei, you've worked hard last year." Yang Wendong smiled, then looked at Zheng Yuhua and said, "Ms. Zheng, Changxing Shipping is now the second largest industry under the group. Next, please introduce it to us?"
"Yes, Mr. Yang." Zheng Yuhua agreed and said with a smile: "My Changxing Shipping is much simpler than Changxing Industry. It only has ships and is currently divided into three businesses;
The first is to help the Hong Kong government transport water. From January to September last year, the fleet transported an average of more than 1 million tons of water per month. After October, the amount of water transported decreased due to cooler weather and rain. The total amount of water transported throughout the year was about 9 million tons, accounting for 150% of Hong Kong's total water consumption, which also greatly alleviated Hong Kong's drought.
This business is due to social demand, so I followed Mr. Yang's request and controlled costs. It is not for profit. This may be a unique project this year, because the Hong Kong government has negotiated with the mainland to divert water from the Dongjiang River, so it is listed separately. "
"Well, it's enough for everyone to know about this." Yang Wendong nodded and said, "In the future, when it comes to disaster relief projects like this, the entire group should not aim to make a profit, because you can't make much money, and even if you do make money, it will have a negative effect."
If it is a disaster in a non-Chinese area, then he might not mind making a little money, but for a disaster in a Chinese area, it would be short-sighted to do so. Any consortium, force or even ancient people fighting for the world must have a base of their own.
"Yes." Everyone answered.
Any large enterprise, even if it does not do good deeds all over the world, should at least do so in its own territory. On the one hand, it can establish a good image, and on the other hand, it is really beneficial in the long run.
Zheng Yuhua continued, “This second business is our own shipping business, which departs from Hong Kong and transports products for Changxing Industry to several major markets such as the United States, Europe, and Japan;
When returning, it will be accompanied by China Resources' grain, some materials needed by our group or other businesses in Hong Kong, or some other business.
This business had a turnover of HK$6800 million last year, and the ships involved were 17 old ships. However, the net profit margin of the shipping business is relatively high, so the data is not bad. "
"Okay, this business is mainly to help Changxing Industrial develop in the early stage." Yang Wendong said with a smile: "However, as the business develops, you will have to gradually take on related business yourself, especially now that the drought in Hong Kong may end, and there will be a large number of ships that used to transport water, and you will need to operate them normally." Zheng Yuhua said with a smile: "Don't worry, Mr. Yang, I have been preparing for this matter for a long time. I have signed cooperation intention agreements with many ports in Southeast Asia. After these ships return, they will specifically operate in Southeast Asia, just like other shipping companies.
And because we have our own maintenance dock, our cost control is much lower than that of our peers.”
"Okay, you take charge of the business operations, and I'll look at the data then." Yang Wendong nodded and said.
In fact, the group does not collect data only once a year. The group office also keeps an eye on each business company. Although it is impossible to find out all the details, if there are problems with the core business, such as shutdown of large workshops, stranded ships, unsalable products, etc., it will definitely be discovered.
In addition, every quarter, group companies will also report a large amount of operating data, just like listed companies, but the details will not be as detailed as the annual financial report. This is also the routine operation of most large groups. They must maintain careful monitoring of the subordinates, but it is impossible to achieve perfect control in real time, so they can only take a middle value.
"Okay, Mr. Yang, rest assured. After these ships are put into operation, I will sort them out in detail for you to review." Zheng Yuhua agreed and said, "The third business of Changxing Shipping is the purchased new ships, including the 4 large oil tankers and 2 bulk carriers purchased the year before last. We will not operate them ourselves, but rent them all to Japanese companies.
We purchased these new ships for $4850 million, while Japanese shipping companies leased them for $2700 million per year.”
"2700 million US dollars?" Everyone was shocked.
Yang Wendong said with a smile: "It seems like a lot, but in fact, after the customer rents the vehicle, within the agreed mileage, all the various expenses are ours, including fuel, labor, maintenance, port fees, insurance, etc., so if we can earn half of the rental fee, it's good."
The cost of renting a boat is far beyond the reach of ordinary people, but there is a similar industry that many people have come into contact with, that is, car rental.
In the past, there were many car rental companies in the mainland that rented cars, drivers, fuel, etc. to large companies. Depending on the mileage, large companies basically had to pay 1/3 to half of the cost of a new car as annual rent.
Ships are asset-heavy, have higher operating costs and higher risks, so the rents are naturally higher. Coupled with the current surge in global trade, shipowners are naturally making a fortune.
"Half?" Everyone's eyes lit up when they heard this. As long as they had an elementary school level of knowledge, they could calculate the profit.
But this is normal. The profits of Hong Kong shipowners are no secret to many people, especially since some shipping companies are affiliated with listed companies and have to announce their operating conditions every year.
No wonder the boss let Changxing Shipping be the second to announce its performance. This result is probably not much worse than that of his own son, Changxing Industrial.
Zheng Yuhua smiled and said: "Shipping companies are like this, but we are also heavily in debt, especially now that we are preparing to purchase a second batch of ships.
The specific information is still confidential at present, and you will know it after it is announced. "
It is no longer a secret in Hong Kong that Changxing Shipping is going to buy more ships. After all, there are too many people and companies involved, so it is impossible to keep it secret, and there is no need to spend money to keep it secret. This is not an acquisition of any company.
Yang Wendong then said: "Shipping is an industry that I am very optimistic about. Like industry, it is an industry that will inevitably grow after the development of the global economy. So I also hope that Ms. Zheng can better develop and expand Changxing Shipping Company in the future;
At the same time, this is also of great significance to the group's multiple businesses. In the future, any industry involving exports will need to rely on shipping."
At the core of the entire industrial chain, transportation is also very important. Especially since Hong Kong is an island, many raw materials and parts need to be imported, and there is no local market, so it can only rely on sea transportation.
If I enter the home appliance industry in the future, I will inevitably encounter the problems of early trolley cases: the transportation cost is too high;
As long as you have your own transportation capabilities, it will be much better. Even if the shipping market encounters a crisis in the future, you can transform yourself into an international logistics company or prepare in advance.
"No problem, Mr. Yang, don't worry, I will do my best." Zheng Yuhua agreed.
"Yeah." Yang Wendong nodded with satisfaction, then looked at Zheng Zhijie and said with a smile: "Old Zheng, it's your turn now."
"Okay." Zheng Zhijie said with a smile: "Mr. Yang, everyone, the business of my real estate company is much simpler. It is currently divided into two businesses, one is property purchase, and the other is the development of various properties for sale.
In terms of real estate, we currently own a total of about 620 million square feet of land, which is 70 square feet more than last year. It is not a lot because last year Changxing Real Estate gave up its investment in the Kowloon Peninsula and mainly invested in some prime locations in Hong Kong Island, which are more expensive and have low transaction volumes. "
“It’s not bad to be able to acquire 70 square feet in Hong Kong Island.” Yang Wendong smiled.
The land prices in Hong Kong Island are very expensive nowadays. In prime areas such as Central and Causeway Bay, the land transaction price has exceeded HK$1,000 per square foot, and the cheaper ones cost four or five hundred. Of course, if the price is spread over each floor of a high-rise building, it must be much cheaper.
Zheng Zhijie explained: "In fact, it is not a pure acquisition. A lot of it is a collaboration between me and Carrefour. We built a medium-sized commercial building, and most of the area of the building still belongs to us. And these locations are not actually very good locations."
Yang Wendong smiled and said, "That's no problem. As long as our Carrefour business is good, even if it's not a prime location now, it will definitely be in the future."
Not to mention the expansion of urban circles in the future, the current suburbs will become core areas, that is, the characteristics of supermarkets and shopping malls, which can create a commercial district.
“Where there is Wanda is the city center.”
This was Wang Wanda's bold statement in his previous life, but it is also correct.
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(End of this chapter)