Chapter 394 Entering the Financial Business

Chapter 394 Entering the Financial Business

Chapter 394 Entering the Financial Business
"300 million US dollars? What do you want so much money for?" Yang Wendong asked puzzledly: "Do you still want to increase production capacity at this time?"

Wang Yongqing nodded and said, "Yes, I still believe that the Asian economy will never be hit by a little economic crisis. Global trade is inevitable now. Japan, some Southeast Asian countries, including Taiwan and Hong Kong, will be the best places to take over the low-end manufacturing industry in Europe and the United States.

Moreover, there are 20 billion people in Asia. Once the economy develops, even if everyone buys a few plastic basins and buckets at home, the demand for plastic will be huge. Wasn’t the rise of Hong Kong’s plastic industry 10 years ago due to this? In the future, the billion people in Southeast Asia will inevitably follow this path.”

Yang Wendong said: "That being said, if you invest so aggressively, aren't you afraid of missing out? If the economy hasn't recovered after your aggressive investment, won't you go bankrupt?"

Sometimes, industry is just like real estate, with ups and downs. If you make a wrong prediction, you will die. In fact, doing business is always risky.

Wang Yongqing added: "So the $300 million is not used to increase plastic production equipment, but various chemical production precision equipment required for the production of plastics, such as acrylic acid and its esters, chlorofluorocarbons, acrylonitrile, etc.
Although Taiwan's chemical industry has developed well in recent years, it is still far behind Japan, Europe and the United States. Many chemical materials still need to be imported. Once I can take advantage of the current low price period to purchase these equipment, I will not only not need to import them in the future, but can also export these materials, killing two birds with one stone."

"So it's similar to developing towards the front end of the industrial chain?" Yang Wendong smiled. He naturally didn't understand chemical materials.

But Wang Yongqing's meaning was also clear. Just like Changxing Industrial, after the industry in hand has reached a certain scale, it needs to develop towards the front end. Otherwise, if it cannot master the industrial chain, it will never be able to develop into a top giant.

Wang Yongqing said with a smile: "Yes, Mr. Yang's Changxing Industrial has actually been doing this for several years. From glue to paper, and investing in my Formosa Plastics, it is all for this purpose;
Formosa Plastics was naturally not willing to be just a processor, so we had to gradually penetrate into the upper and lower ends. The lower end was more complicated, with too many types of plastic products, and I didn’t know what to do, so I started with the upper end.

Although the raw material of plastic is naphtha, which I cannot produce at present, various chemicals are also crucial and account for a large part of the cost. In addition, the price of these chemicals fluctuates greatly, which makes it easy for me to lose control of the cost. It would be much more convenient if I could make it myself.”

"It's a good idea for you to enter the petrochemical industry," Yang Wendong nodded.

It is difficult for him to develop this kind of industry in Hong Kong. If it involves highly toxic substances, he dare not try it because the risk is too high and it is unnecessary. When it comes to safety, he would rather spend more money. The gas leak in India in the 80s was really terrifying.

However, it would not be a problem if Wang Yung-ching were to come, because he must have done these things in the past. Otherwise, without the front-end and back-end industries, Formosa Plastics would not have become a world-class plastics group. Now, perhaps because of his large-scale early investments, he is ready to invest in these industries in advance.

Wang Yongqing added: "Mr. Yang, you should also prepare to make plastics in Hong Kong. Once my chemical investment is successful, it will be much easier for you."

"Yes." Yang Wendong also smiled and said, "From this point of view, it is also good for me."

The fact that they were going to invest in plastics could not be concealed. First of all, they had to discuss with the Hong Kong government whether they could build such a polluting petrochemical industry. At the very least, they had to get verbal consent first, and then they could consult overseas production equipment manufacturers, etc. Once they informed the Hong Kong government, some senior executives in Hong Kong's business community would definitely know about it.

Even if the Hong Kong government keeps it secret, it will have to look for equipment suppliers and consult their opinions later. Besides, even if everything is kept secret in the early stages, it would be meaningless because the factory will be built sooner or later.

It wasn't a military factory during the war, so there was no need to keep it secret. Instead, Wang Yongqing was asked for his opinion very early on. Wang Yongqing was also a smart man. He knew that he could not influence his major shareholders, investors and customers, so he took the initiative to give some small suggestions.

Wang Yongqing nodded and said, "Cooperation is beneficial to both sides. Whether it is Hong Kong or Taiwan, it is very difficult to build a petroleum derivative industry chain with plastics as products, but we can cooperate.

Taiwan has talent, land, and government policies; Hong Kong has capital and markets. The two sides are relatively close and only require small boats for transportation. They can be combined to create an industrial chain base.”

"I am really impressed by Wang Sheng's idea. I admire him." Yang Wendong smiled and asked, "But if you do this, Wang Sheng, aren't you afraid that I will scale up on my own and stop cooperating with you?"

Today, Changxing Industrial is still a major customer of Formosa Plastics. Even if ordinary suppliers don’t say anything, they will probably feel worried when they see their customers personally investing in their industries.

"Haha, Mr. Yang is right. It's a lie to say you're not worried, but worrying is useful?" Wang Yongqing said with a smile: "I admire Mr. Yang's wide range of industrial layout, so I'm not surprised that you're trying to make plastics yourself;
But it is precisely because of this that I should take the initiative to cooperate with Mr. Yang, because in addition to Changxing Industry and Hong Kong, there are even bigger markets overseas. As I just said, if one billion people in Southeast Asia each bought a plastic basin, how big would the market be? Many pipes will also gradually use plastics, how big would the market be? "

"Yes, compared to these, my Changxing Industry is nothing." Yang Wendong nodded and said, "Okay, I think this deal is okay. 300 million US dollars is not a problem, but I also have two conditions."

"Mr. Yang, please speak." Wang Yongqing asked happily.

Yang Wendong said: "First, you need to develop a reasonable investment plan. Any investment of more than 5000 US dollars must be included in the plan for my review. In addition, after the funds arrive, they will also be supervised."

"Okay, that's only natural." Wang Yongqing agreed readily. If you want others to invest or lend you money, there will definitely be restrictions.

Yang Wendong added: "Second, 5% of the shares is too little, how about 10%?"

"10?" Wang Yongqing paused and said, "Mr. Yang, you already have 20%. Another 10% would be too high."

Yang Wendong said, "Mr. Wang, I heard that when you first built Formosa Plastics, formerly Formosa Plastics, another investor held 45% of the shares?"

There are always many tragic figures in the history of human business, who were once extremely wealthy but sold out due to shortsightedness. For example, Li Zekai once held 20% of Tencent shares, but sold them for five times the profit and earned $1000 million. One of the founders of Ele.me did not continue to start a business in order to take the postgraduate entrance examination.
There was also a person next to Wang Yongqing. When Formosa Plastics was in the most dangerous time, this person forced Wang Yongqing to buy his shares at a low price. Now he has completely missed the opportunity to make a fortune.

“That’s different.” Wang Yongqing said with a smile: “At that time, it wasn’t considered an investment, but a co-founder.”

Yang Wendong nodded and said, "I understand, but I also have my own requirements. So, since we can't come to a decision today, let's wait for me to send someone to negotiate.

Many things also need to be determined before we can discuss, such as the current market value of Formosa Plastics, how many shares we are trading, future cooperation plans, and the $300 million interest, etc. "Okay, we just need to have an intention first." Wang Yongqing said with a smile: "Then I'll take my leave. I will make a detailed plan within a week and send it to Hong Kong."

"OK." Yang Wendong said.

After Wang Yongqing left, Yang Wendong looked at Wei Zetao, who had been silent, and said, "Old Wei, what do you think about this matter?"

Wei Zetao replied: “If Wang Yongqing can succeed and build a complete petrochemical industry chain in Taiwan, it will be very helpful to us;
Even one day, we can do the same thing in Hong Kong, as long as they train people here."

In many industries, the most lacking thing is people. It is useless even if you have money. It is impossible that all the grassroots employees of a Hong Kong company are poached from Japan, Europe and the United States, right?

Yang Wendong said: "Yes, in this way, the cost of our most core raw material, plastic, will be further reduced in the future."

Wei Zetao added: "It seems that Wang Yongqing and I have the same idea. We want to get rid of him and control the industrial chain ourselves, and he also wants to not be completely dependent on us."

Yang Wendong nodded and said, “Yes, we are all smart people, and we use each other. He wants my financial support, and I actually also like his industrial advantages.

But this is also a good thing. It is more valuable to cooperate with powerful people. Not to mention how many years from now, at least in the next few years, both sides will definitely benefit from it. "

In human history, some business cooperation was also temporary. For example, when Alibaba allowed Yahoo to invest in it, Ma Yun took advantage of Yahoo's huge resources and funds to take off quickly, establishing the reputation of becoming one of the top ten Internet giants in the world.
But this process also made Yahoo the largest shareholder of Alibaba. More than ten years later, it took Ma Yun a huge price to gradually recover the shares. This was a very fierce game. Even if Yahoo had not declined, Ma Yun would not have been likely to succeed.

Wang Yongqing seems to have the same idea now, to use his own funds to grow first and worry about other things later. However, he is not Yahoo, and it is not so easy to get rid of it.

There is competition and dependence on each other, which is also an art in the business world. In the future, such a situation may occur between me and Walmart or other top giants.

And this is normal. As a time traveler, I rely on the opportunity to invest in capable people. However, these capable people may want to develop by relying on the strong power of investors, but they also want to not lose the controlling rights or management rights, etc. Everything is very contradictory. This era may be better. If it is the Internet era, then this kind of thing will be too common.

Wei Zetao said with a smile: "Mr. Yang, you were able to invest in such a person, which is enough to prove that you were good at judging people in the early stage."

"No matter what happens in the future, since it is helpful to us now, if Wang Yongqing develops himself, we will also have financial returns, so we naturally have to help him." Yang Wendong continued, "This matter is left to you. Send someone to review Formosa Plastics first, then review the information he provided, and then discuss how to cooperate.

The interest is not important, but as for the shares, he may not agree to 10%, so my request is 7.5%."

In the early days, one cannot ask for too many shares, because if one asks for too many, the other party can still change its name; but now that Formosa Plastics has grown to a certain scale, it is impossible for all parties to allow him to start a business again. At most, he can transfer some profits through other means, which will not affect the overall situation.

So today, I won’t be polite anymore.

Of course, if Wang Yongqing is really powerful in the future and can use other means to gain benefits to make me give up some of my assets, then the extra assets acquired today can also be bargaining chips.

Wei Zetao nodded and said: "Okay, I will form a professional team to take charge of this matter."

"Actually, I have another new idea." Yang Wendong said, "Well, let's discuss it together when we return to Hong Kong tomorrow."

The next day, everyone finished their trip to Taiwan which lasted about a week;

Changxing Group has also begun initial preparations for investment in Taiwan. However, as Taiwan real estate is not open to foreign investment, it can only regard it as an industrial production base and a market for a few industries.

On March 3, Yang Wendong called Yao Jingyi from the headquarters, Wei Zetao from Changxing Industrial, and Zheng Zhijie from Changxing Real Estate.

And said: "I plan to set up my own financial company."

"Financial company? Is it specifically responsible for investment?" Yao Jingyi asked.

Yang Wendong nodded and said, “Yes, before, basically all the subsidiaries of our group were developing their own businesses, and the few acquisitions were also handled by the subsidiaries or me;
But now the company is getting bigger and bigger, so I plan to set up a subsidiary specializing in financial acquisition business. "

Although many people do not like finance and believe that finance is detrimental to the country, for individuals, finance is still more profitable. And if you have the foresight to use it, you would be a fool not to take advantage of it. Besides, the money earned from finance can also be fed back into real estate and industry.

Yao Jingyi said: "There are more and more listed companies in Hong Kong now, and many people have started to buy stocks. We can also participate in it."

Wei Zetao thought for a moment and asked, "Mr. Yang, if we have a financial company, then when our subsidiary acquires shares of a certain company, will it also be under the umbrella of the financial company?"

PS: Ask for monthly ticket

(End of this chapter)