Chapter 404: The Goal of Changxing Trade

Chapter 404: The Goal of Changxing Trade

Chapter 404: The Goal of Changxing Trade

Wei Zetao also said: "Yes, now the multiple businesses under Changxing Group can help and promote each other. I didn't quite understand Mr. Yang's early plans at the time, but now I think it's really admirable."

"Haha, don't flatter me too much." Yang Wendong said with a faint smile: "In fact, it is also because Hong Kong is relatively small, many things need to be imported, and the market is also overseas, so many things have to be done by ourselves."

If it were in the mainland of the 21st century in the past, even if you had some very good ideas, you would only do your own things and outsource all other businesses, because the country has well-developed industrial buildings and everything can be bought, so it is not cost-effective to do it yourself.

But the situation in Hong Kong at this time is completely the opposite. Everything needs to be imported and basically all goods need to be exported. If you want to expand, you must find a way to establish an industrial chain in Hong Kong and participate in the shipping market, etc. Of course, shipping is special. It is because of knowing the history that Yang Wendong dares to invest in such an asset-heavy industry as shipping.

However, when the industrial chain is completely in your own hands, it will bring huge benefits, just like BYD in its previous life. It started with electric cars, but there was no supporting industry for electric cars around 05, so it could only develop the entire industrial chain by itself. By 2021, with the completion of technological research and development and the cost advantage of the entire industrial chain, it has been far ahead of others.
Nowadays, in Hong Kong, Yang Wendong can only take this path. Fortunately, his company's products currently have a relatively simple structure and can be produced in Hong Kong. When it comes to complex electronic products in the future, I am afraid that Hong Kong alone will not be able to accommodate them. At that time, he may only be able to go to Taiwan or even some places in Europe and the United States. We can only wait and see for the details.

Wei Zetao said again: "Mr. Yang, Changxing Trading is getting bigger and bigger now. Should we consider upgrading it to a first-tier subsidiary of the group?"

Yang Wendong asked curiously, "Why? Isn't it good to let you manage a large enterprise?"

Wei Zetao said: "It's good, but I was good at factory management before. In the early days, Changxing Trade was just to cooperate with Changxing Industry, and I could still manage it.
But now there are more and more businesses, and I also help many factories in Hong Kong to connect with customers, and now I have to trade with the mainland. This is really not what I am good at? I am afraid that it will delay Mr. Yang’s plan. "

"What you said makes sense. The scale of Changxing Trade is indeed getting bigger and bigger now." Yang Wendong nodded and said, "Okay, let Changxing Trade become a first-tier subsidiary. It does meet some of my requirements. Let the current person in charge of Changxing Trade come to see me tomorrow, and I will talk to him alone."

Today, the Changxing Group is one of the largest corporate giants in Hong Kong. It also adopts the decimal management principle that was well-known in the previous life, that is, one person manages 10 people, and the next 10 people manage 100 people, and so on. Under normal circumstances, there will be no cross-communication and conversation. This is also the rule. Even if there is a report, there is a special internal supervision department, and it will not involve crossing.

Of course, 10 in the decimal system is just a similar number. In fact, there may be a little more. The person in charge of the group's first-level subsidiaries can talk directly to the boss Yang Wendong. There is no need to invite him in advance. They can just come directly when there is something. Everyone generally knows what to do and will not come for every little thing. It all depends on one's ability.

"Okay, I'll let Zhang Zefei come here tomorrow." Wei Zetao said.

"Okay." Yang Wendong nodded.

He also knew Zhang Zefei, the person in charge of the second-tier subsidiary. He also knew him and would come into contact with him during company group meetings or visits, but he didn't know much about him.

Today, with the development of the group and the rapid development of Hong Kong's economy, foreign trade will become one of the core of the entire economy. In the past history, most of Hong Kong's foreign trade was controlled by British companies. Now that we have traveled through time, we must bite off a piece of meat from the British.

The next day, at the Changxing Building headquarters, Zhang Zefei followed Wei Zetao to the boss's office.

"Xiao Zhang, relax a little." Wei Zetao said with a smile: "Mr. Yang is also very polite to his subordinates. As long as you don't make a big mistake, you can be more casual."

Zhang Zefei quickly said, "Okay, Mr. Wei, I have met Mr. Yang several times before, and I can indeed feel that Mr. Yang treats us all equally."

Many wealthy people in Hong Kong basically treat their subordinates as they please, get angry at them at every turn, or even ignore them outright in many cases. But Yang Wendong is indeed different. He is much more polite.

No matter whether it is sincere or not, even if it is fake and you have been pretending for a lifetime, it makes people feel comfortable.

Soon, the two arrived in front of the office.

After the assistant passed the message, Wei and Zhang walked in. Wei Zetao said, "Mr. Yang, this is Zhang Zefei, the current head of Changxing Trade."

"Hello." Yang Wendong said with a smile and shook hands.

"Hello, Mr. Yang." Zhang Zefei also shook hands in return.

"Please sit down." Yang Wendong said with a smile.

Afterwards, the assistant immediately served tea, and the three of them chatted casually for a while, and soon got into the formal topic.

Yang Wendong asked first: "Lao Zhang, can you give me a brief introduction to the current situation of Changxing Trade, that is, the core business. There is no need to talk about the small businesses. I want to understand your situation first."

All along, the boss Yang Wendong has only been paying attention to the operating conditions of the first-level subsidiaries. Other second-level subsidiaries are planned under the management of the first-level subsidiaries. Basically, there will be a basic situation of turnover and income every year, but the specific operating details are unclear. Before these companies have grown to a certain scale, Yang Wendong will not care too much, otherwise he will be exhausted.

Although the scale of Changxing Trading is not very large now, its future planning goals are still not small. Therefore, it needs to be upgraded to a first-level subsidiary, and he, as the boss, naturally needs to know the specific situation.

"Okay, Mr. Yang." Zhang Zefei agreed and introduced: "Currently Changxing Trading has three main businesses;
The first is to connect with Changxing Industry to import plastic particles from Taiwan, and then sell them to other major plastic factories in Hong Kong and some Asian countries.”

"Doesn't Formosa Plastics do its own business in Southeast Asia?" Yang Wendong asked curiously. He really didn't know about such trivial matters.

Zhang Zefei replied: “Some larger countries, such as Thailand, Malaysia, and Indonesia, are contacted by themselves, but there are many small countries where communication is cumbersome, transportation is troublesome, and the volume is not very large;
In terms of foreign trade, Taiwan is not as experienced as Hong Kong, so they handed it over to us. However, I recently saw that Formosa Plastics seemed to want to take it back, and they have also begun to try to communicate directly with these countries. "

“Well, that’s normal. Formosa Plastics has grown in scale, so it’s normal to have some ideas.” Yang Wendong nodded.

In the early years, Formosa Plastics was short of manpower, material resources and funds, and it was probably difficult to find a bunch of foreign trade personnel who could speak English. In that case, it was very cost-effective to cooperate with Changxing Trading, which excels in trade. Although Changxing Trading is also a new company, there are many trade talents in Hong Kong, and you can spend money to put together a team that is ten times stronger than Taiwan.

Now that Formosa Plastics has grown to a certain size, it is normal for it to form its own trading team.

Wei Zetao also said: "Yes, once a company becomes big, as long as it has the ability, it is impossible to hand over its lifeline to others. Even if we are shareholders, Wang Yongqing will not completely trust us."

"Because we are shareholders, he doesn't trust us even more." Yang Wendong smiled and said, "But I am even happier that he can do this, because it shows that he is a capable and ambitious person. Only such a person can make his company bigger or even world-class." Wei Zetao said, "But if this is the case, when his scale is a little bigger, will he find a way to dilute our shares?"

"We just need to counter his moves." Yang Wendong said, "As long as we don't fail, he basically has no way to deal with us. If he wants to take away our shares, it will definitely cost a huge price."

There is a rebuttal to investment, that is, if you invest too much, when the other party is too successful, there will inevitably be a backlash. This is inevitable, because if you put yourself in their shoes, everyone will do the same thing... This is also why in many investments in Internet companies in the past, after several rounds, everyone's share was not high. This is deliberate control by entrepreneurs, and investors also avoid future disputes. Generally, they don't ask for a lot, unless it is not purely for investment.

Of course, this is because no normal person can guarantee 100% that a particular company will be successful, so investors are willing to cast a wide net to catch fish.

There are a few exceptions. For example, Alibaba was invested by Masayoshi Son and Yahoo, who acquired a huge stake of nearly 60%. This caused resistance from Ma Yun's team. Later, taking advantage of Yahoo's decline, they spent US$76 billion to buy back half of Yahoo's shares. Of course, for Yahoo, this is still a huge return on investment.

As long as early investments are made, the returns for later investors can definitely be guaranteed. And if there are no problems, like Masayoshi Son, Alibaba will have no chance to return at a high price. The same is true for Formosa Plastics today. It has already invested a lot, and this will be the most basic benefit in the future.

Of course, these are just shares. It is difficult to interfere with the control of the company, especially when the other party has the government backing them, so there is no need to think about this.

Wei Zetao said with a smile: "It seems that we must try to make plastic raw materials ourselves."

"If we want to become a world-class company, this is a must," Yang Wendong said. "There is no other large plastics manufacturer near Hong Kong. If it were to compete with Formosa Plastics, we wouldn't have to be so anxious."

Many times, it is not a problem if we do not produce some parts ourselves, but the prerequisite is that several suppliers must restrain each other. Otherwise, if there is only one, we will be strangled. Although we have a good relationship with Formosa Plastics, if we want to be self-reliant, it is better to control it ourselves.

"Yes." Wei Zetao nodded and looked at Zhang Zefei: "Mr. Zhang, go on."

"Okay." Zhang Zefei continued, "The second business is to use the channels that Changxing Industrial has developed over the years to help many plastic manufacturers in Hong Kong sell their own products. The most common ones are plastic daily necessities and toys."

"I know about this business, but what are its specific benefits?" Yang Wendong asked.

Several products of Changxing Industrial are considered small hits, so channels have come to them after they were launched. After a few years, they have channels all over the world.

Many of these channels can also sell goods from ordinary factories in Hong Kong, but Changxing Industrial itself will not do such a thing. In order to maximize commercial interests and at the same time help many small and medium-sized manufacturing companies in Hong Kong, Changxing Trading did this.

Zhang Zefei said: "Last year, we completed HK$700 million of foreign export trade for more than 6000 companies in Hong Kong; this year it should increase by about 20%."

"6000 million? So high?" Yang Wendong asked in surprise.

Zhang Zefei smiled and said, "Yes, but these are very basic daily necessities, and there is fierce competition overseas, so the profit is very low. This is because Changxing Shipping can sometimes help out and make a profit.
Our trading company generally has a 5% profit margin, which is not high because Hong Kong's products are too simple and there is competition from British trading companies, so the profit of this business last year was about 300 million."

"300 million is not bad." Yang Wendong nodded and said, "But if these Hong Kong companies want to make more money, they still have to find a way to transform. Some simple plastic products will soon be produced in Southeast Asia, and they won't be able to be sold at all by then."

In the 60s, it was not just Hong Kong that was developing; Southeast Asia was the same. The production of plastic daily necessities was very simple, and with a little industrial development, people could produce them themselves.

Zhang Zefei said: "Yes, the plastic flower industry has not been doing well recently. It's not because of market problems, but because there are too many manufacturers. Plastic products are indeed becoming more and more difficult to sell;

Toys, on the other hand, are selling better and better. Not only our own copyrighted toys, but also many toy guns and children's toys are selling better and better. "

"Toys will be a big market." Yang Wendong said: "In the future, you also need to focus on developing this market. The future potential is unlimited."

In the 1970s and 1980s, toys were always among the top five export products in Hong Kong. Even decades later, during the early stages of the mainland's reform and opening up, toys were still one of the main export businesses in the mainland.

"Okay, I will focus on expanding this channel and encourage Hong Kong factories to produce toys." Zhang Zefei added: "The third business is the trade of food, which currently mainly involves rice, wheat, potatoes and the like. It is mainly because of China Resources' previous needs that we have known overseas distributors, and we have a basis for further cooperation.

It’s just that China Resources is preparing to reduce imports, so we won’t be able to get preferential prices. This puts us in a passive position, because the profit margins of grain trade are actually very low, and we have to rely on large volumes to lower the purchase price and unit transportation costs.”

Yang Wendong nodded and said, "So you have to find the market first, and then you can do this business the other way around?"

Zhang Zefei said: "Yes, in fact, there is another way to play similar to futures, which is to sign agreements with many farmers in Europe, America, South America and Australia in the early stage to lock in future prices. Because it can be traded in advance, the price will be lower;
Then, when the grain matures, if the grain price rises or does not fluctuate much, you can make money. If it falls, you will lose money. This is basically how many big companies play. Some big conglomerates will even lock up half of the farmland in a small country. "

"Lock in the risk, I see." Yang Wendong said, "Then can we do this?"

"It's a bit difficult. We don't have many stable customers." Zhang Zefei said: "Buying all this food, we have to transport and store it, which is very risky."

"Let's take it step by step. We can consider this when the scale is bigger." Yang Wendong agreed.

Although he is a time traveler, he is not clear about the details of the food price fluctuations in the 60s. He only knows that with the development of the economy, food prices have gradually increased, but the rate of return is too low, and there will inevitably be a lot of fluctuations in the process of rising. It is better to take it step by step.

Once you are familiar with it and have enough experience and a team, you can consider other things.

At this time, Wei Zetao said: "Mr. Zhang, the group is currently preparing to focus on sugar processing. You can also participate in this area and find customers for Watsons' sugar factory. If there are more customers, they can expand their scale, so that they will have greater voice and cost control capabilities."

"Sugar? Okay, sugar is still in great demand in many places." Zhang Zefei said, "I will do my best to open up new markets."

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(End of this chapter)