Chapter 432: Summary of Wealth in 1964

Chapter 432: Summary of Wealth in 1964

Chapter 432: Summary of Wealth in 1964 (Part )

"The paper factory needs to expand." Yang Wendong paused and said, "But wait a little longer. If Singapore is suitable, I plan to invest in Singapore."

Although I will remain neutral on some things in the future, I don't want to get too close to Taiwan. I have invested in quite a few factories in Taiwan over the years. If I continue to invest, I will be deeply tied to them.

Singapore is the most suitable place besides Taiwan. It is predominantly populated by Chinese and has an excellent geographical location. Using Singapore as a production base, it can cover many markets in Southeast Asia and even be closer to the European market.

Wei Zetao said: "Singapore is also a good place. There are a lot of wood and wood pulp factories in Malaysia nearby, so the transportation cost of pulp will be much lower."

"Diversification is also something we need to consider." Yang Wendong added: "We can't just focus on Hong Kong and Taiwan. We may even invest and build factories in other countries in the future."

Although Europe and the United States are not very suitable for manufacturing, for some special industries, it may be more convenient to produce nearby. There are also some issues that need to be considered, such as tariffs and transportation, or political reasons. Even mainland companies in the 21st century have to build factories overseas when exports are very large, and this is also the reason.

"Yes." Wei Zetao also understood this and said, "The Second Business Unit also went to Singapore for investigation. They found many suitable locations. I will let them see which places are suitable for building a paper mill."

"Yeah," Yang Wendong nodded and said, "Plastic products are indeed much better, basically no pollution. It can be said to be the best quality factory."

"Yes, many countries have approached me now and want us to invest." Wei Zetao said: "Last year, the second business unit's total sales were HK$2.42 million, and the third business unit's total sales were HK$1900 million;
The growth of trolley cases and hooks is about 8%, while the growth of plastic bags and woven bags is more than 300%. Storage boxes are new products. We sold 400 of them last year, with a turnover of HK$2200 million.

"Well, good." Yang Wendong said: "These businesses just need to develop normally. The key is to use all means to master the upstream and downstream industrial chains, strictly control costs, and maximize the cost-effectiveness.

When the group has more funds in the future, I will invest more deeply. As long as we control the plastic and paper markets in the future, there will be absolutely no problems. "

Plastic and paper are products that will never be eliminated in the future. Even in the Internet age, the demand for these two products will increase a lot.

Of course, there are other industries, such as textiles, grain, sugar and even other infrastructure, but Changxing Group is still in the initial stage of layout and is still far from success. Only plastics and paper have gone halfway, and based on the current control of the industrial chain, it already has a great competitive advantage.

Wei Zetao said: "Yes, it's just that the new products developed by our own fourth business unit have not achieved any very good results so far; although the total sales last year were close to 3000 million, it was only achieved by relying on the advantages of the industrial chain and channels."

"That's okay. It's good to be able to make good use of the existing advantages." Yang Wendong said: "Creative products are very rare in themselves. We can't rely on this to do business;
Your task this year is to prepare for overseas investment and to place our future increased production capacity in Singapore. In the future, my factory's main production bases will be Hong Kong, Taiwan and Singapore, with Hong Kong as the main base and Singapore and Taiwan as the supplementary bases. "

"Yes, I understand." Wei Zetao agreed.

When a manufacturing enterprise grows to a very large scale, it will inevitably separate production locations. A large country like the United States may be able to build factories in different parts of the country, but Hong Kong? It's just a city.

At present, there are only three territories dominated by Chinese, and each place has different advantages, which just happens to be in line with the interests of Changxing Industry.

Changxing Industry is still the core industry of the entire Changxing Group and is also the manufacturing factory that generates the most employment in Hong Kong today. Even the future expansion into Singapore and even the reformed mainland in a dozen years will require reliance on Changxing Industry.

Of course, by that time, Honor Electronics and Watsons may also become giants in the industry.

However, compared with the manufacturing industry, some industries are also very important, such as the shipping industry that controls transportation. No matter how developed the manufacturing industry is, it still needs to rely on ships, cars and other tools to transport products to designated areas for sale. Its importance is self-evident.

As the largest freight transit hub in Asia today, Hong Kong has also given birth to a large number of top shipping companies, and Changxing Shipping is one of them.

On January 1, Yang Wendong came to Kwai Chung, where there is an 13-story building, which is the headquarters of Changxing Shipping.

After reaching the top floor, Yang Wendong looked at the dock in the distance and asked, "Are the five docks we have enough now?"

Zheng Yuhua, the person in charge of Changxing Shipping, replied: “Yes, the five docks are currently used by us, and we also provide maintenance, upkeep and repairs for other ships;
Over the years, Hong Kong's trade transit and exports have increased, and the number of ships has also increased, resulting in our five docks being insufficient. "

"Have you applied to build a new shipyard?" Yang Wendong asked again.

When the business was first started, things like building a shipyard still required the personal involvement of the boss Yang Wendong; however, as the scale expanded, these things were gradually delegated.

"I applied. I applied to continue building a new dock in Kwai Chung, but the Hong Kong government did not agree." Zheng Yuhua said: "The Hong Kong government suggested that we go to Tsing Yi Island."

“Disagree?” Yang Wendong thought about it and analyzed in his mind that the Hong Kong government was probably really planning a container terminal and found that Kwai Chung was suitable, so they would not approve new land to others.

Zheng Yuhua added: "Tsing Yi Island should be the industrial area that the Hong Kong government is about to develop. I heard that the shipyards of Whampoa and Taikoo will also move there."

"Then cooperate with the Hong Kong government." Yang Wendong said.

"Okay." Zheng Yuhua said, "Mr. Yang, last year's financial information has also been released. Please take a look."

"Okay." Yang Wendong nodded, then took the document and read it carefully.

Compared with Changxing Industrial, Changxing Shipping's business is much simpler. Its core business is to rent out new ships and collect rent, and operate old ships by itself. The old ships it operates are generally its own internal business.

After a while, after Yang Wendong finished reading, Zheng Yuhua said: "Last year, after deducting bank interest and ship discounts, our total profit was HK$4300 million, and the main income was ship leasing."

"Well, renting a boat is really profitable." Yang Wendong said with a smile.

Zheng Yuhua replied: "Yes, the shipping kings in Hong Kong are expanding and buying ships at a very fast pace because ships are so profitable. Judging from the rate of return in the past two years, a ship can basically pay back in three years, and the rest is pure profit." "This profit margin is really crazy," Yang Wendong nodded and said.

Nowadays, global trade is developing rapidly, but there are not enough ships. In this situation, ship freight rates have skyrocketed. In exaggerated cases, a cruise ship can earn millions of US dollars by making a trip from the Middle East to Japan. This is also the reason why many ship owners are reluctant to do long-term leases. It is really too tempting to make money in the short term. Few people will consider the future. It is enough to make money now.

Zheng Yuhua added: "We currently have about 40-ton ships that have not been built in the shipyard in Japan. Once all of them are delivered this year, the profits this year and next year will be even higher."

"Well, I know that." Yang Wendong paused and asked, "What do you think if we buy a new ship, will it work?"

"Still buying?" Zheng Yuhua was shocked, and then said, "Mr. Yang, although our current income is good, our debt is already very heavy. According to the risk management strategy of the Japanese bank, it may be difficult for them to lend us money again."

"Yes, they also have to consider the risks." Yang Wendong said: "What about Taiwan? Their ship will be completed soon, right?"

Zheng Yuhua replied: "Yes, it will be delivered in April this year."

Yang Wendong nodded and said, "Okay, let's wait until April to see if there are any problems. If not, we can continue to order two more, with the conditions and prices similar to before."

"Okay." Zheng Yuhua agreed.

Yang Wendong added: "Let's also go to the Bank of Japan and ask if there are any opportunities for cooperation."

Although he knew that he had borrowed too much, the opportunities in the future were too rare. Not to mention the operation of the ship, a ship worth 1000 million US dollars today could be worth 3 or million US dollars when the Middle East crisis broke out. He could make three times the money by reselling it without doing anything, and if leverage was used, it would be ten times the money.

When the profit reached 300%, the capitalists would dare to do it even at the risk of being hanged. But now, there is almost no risk, because his existence cannot affect the Middle East crisis, and the global demand for shipping has been increasing. Even if there is no Middle East crisis, he will just make a little less money.

"No problem, I will go to Japan and visit the local bank." Zheng Yuhua could only agree.

She also knew that her boss was very optimistic about the shipping market. However, no matter how optimistic he was, such an investment was still too radical. From a risk perspective, even if a market would continue to perform well in the long run, it did not mean that it would rise steadily.

What is more common is a volatile rise, sometimes high and sometimes low. If the trough period is too long, it may be fatal for players who use larger leverage.

Yang Wendong added: "That's it. We can just do business as usual. We will continue to buy second-hand ships, but not those that are too broken. We need to be able to operate for at least seven to eight years or ten years."

Although there is a shortage of shipping capacity after the Middle East crisis, it is not a period of large-scale naval warfare after all, so there are still some requirements for ships.

"Okay, I have also been buying second-hand ships. I bought a total of 8 ships last year." Zheng Yuhua said: "It's just that the freight rates have risen a lot now, and the competition for second-hand ships has become more intense."

People who are able to do shipping business are not fools. Although second-hand ships cannot compare with new ships in terms of profit margins, the investment cost is low. At most, they will cost more in fuel and maintenance, which is still very profitable.

Yang Wendong said: "Just follow the market price. Competition is normal. As long as it is suitable, we will take it, especially cargo ships that can be converted into containers."

"I understand." Zheng Yuhua agreed.

In the afternoon, Yang Wendong returned to Changxing Building.

He was also aware of the operating conditions of the three core industries last year. As for Changxing Real Estate, it was actually just cashing out last year and did not engage in any other business.

Half an hour later, Wang Fengzhi, the group's chief financial officer, came in with some documents and said, "Mr. Yang, I have sorted out the financial data of Carrefour, Changxing Film, and Culture."

"Okay, thank you very much." Yang Wendong took the document with a smile and started reading it.

Today, with the development of the group's scale, although many industries have a promising future, they are not very large at the moment.

Changxing Shipping, Changxing Industry and Changxing Real Estate are the three pillars of Changxing Group; as for the others, they are not enough at present and may have to wait for a few years. Of course, the first three will also develop.

However, when the scale of an enterprise is too large, the boss will only focus on key industries and just know about the rest. For example, in the 90s, Li Jiacheng in his previous life basically did not think any project worth less than billion was worth holding a meeting.

Wang Fengzhi said with a smile: "The financial turnover and profits of several subsidiaries are also written at the back. Currently, Carrefour's turnover has exceeded 100 million, and its net profit has exceeded 10 million;
Honor Electronics is similar, but the profit is a little higher, while the other companies are a little less, mainly because they are mainly engaged in business within Hong Kong. However, it is estimated that Changxing Culture will be much better this year. "

"Well, it's OK. The total profit of these subsidiaries added up to more than 4000 million, which is almost comparable to Changxing Shipping." Yang Wendong said: "And in terms of potential, Honor Electronics and Changxing Culture have more prospects."

It is not yet the 70s and the electronics industry has not yet exploded, so Honor Electronics' main products are still home appliances. Competition overseas is very fierce. However, the market is large enough. If it gains a small part of the market, its turnover will be able to exceed that of Hong Kong companies such as Changxing Culture, Changxing Films, Media, and Watsons.

Admittedly, these companies are also trying to expand overseas markets, but it is more difficult. Except for Changxing Culture, which may be able to move faster by relying on the comics in the minds of time travelers.

"Yes, any one of our subsidiaries would be a top company in Hong Kong," said Wang Fengzhi.

Yang Wendong added, "Okay, leave this document here. The New Year is coming soon. You should keep an eye on the various companies under your control and pay close attention to the employee New Year benefits. With such a large scale, there will always be bugs. Once you find any, tell the General Affairs Department immediately."

"Okay." Wang Fengzhi agreed.

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(End of this chapter)