Chapter 386: Annual Profits Exceeding 100 Million
"Alright, beverages and food are some of the most essential parts of daily life," Yang Wendong continued. "When the time is right, I'll bring in the Group's headquarters to help push expansion. But first, you need to prove your own ability—no amount of advertising can save a product that doesn't taste good."
The "right time" he referred to would be when his capital reserves were stronger—around 1968—and when his overseas supermarket investments had reached a stable scale. Even if the international food and beverage market wasn't massive, getting a foothold was crucial. Once that first step was secured, the rest would come more easily.
What mattered most was the rise of containerization. While its impact on beverage shipping was limited, for other food items it was a game-changer in logistics efficiency.
Zhou Haoran grinned. "Understood. I'm also preparing to launch a line of potato chips. But the flavor testing has been time-consuming. Since our main market is overseas, we've had to do testing directly in Europe and America."
"For the overseas market, you can use Walmart in the U.S. and some of the European supermarkets I've invested in. Just airmail samples and offer a small fee to have them help with testing," Yang Wendong said.
"Perfect, that'll make things much easier with internal support," Zhou Haoran replied, smiling.
Sending teams abroad was costly—airfare, visas, accommodation, and long communication delays. But with local partners, those problems could be easily solved.
"Mhm." Yang Wendong smiled, then turned to Qin Zhiye and Zhang Zhiyuan. "Old Qin, old Zhang, looks like it's your turn now."
"I'll go first," Qin Zhiye said with a chuckle. "Changxing Media currently has two core businesses—radio and newspapers. Our radio programming now holds about 60% of the Hong Kong market. Many Chinese residents here are regular listeners.
As for our newspapers, Kwahua Daily has become the top high-end paper in Hong Kong, with an average daily circulation of 15,000 copies. Oriental Daily has about 35,000 copies per day, ranking just behind Sing Tao Daily and Ming Pao—but the gap is shrinking fast."
"Excellent," Yang Wendong nodded. "Still, let's aim for Oriental Daily to become number one in the city."
"Understood." Qin Zhiye nodded. "One major project this year is the launch of TVB. We're expecting to begin broadcasting in August. Based on international trends, the TV business should outperform both print and radio—assuming enough households own televisions."
"Don't worry about that," Yang Wendong said with a smile. "Once Rongyao Electronics begins local production of cathode-ray tubes, costs will drop even further. At least in Hong Kong, we can significantly cut the price of TV sets."
Advanced technologies had to be tackled step by step—start with assembly, then move to domestic production of key components, and eventually go upstream into the supply chain. This was the path to sustainable growth in manufacturing. Otherwise, cost control would always be in someone else's hands.
At this point, Wang Zhiqun chimed in. "Mr. Qin, no worries. The CRT production line arrived in Hong Kong last November. We've finished debugging, and the first CRTs are already rolling out. We're still conducting tests, but if all goes well, we'll launch the product by May or June."
The cathode-ray tube was the heart of a TV, and technically the most difficult part. Once local production began, strict testing was needed. One defect could ruin a brand's reputation.
"Thank you, Mr. Wang," Qin Zhiye said with a grin.
Yang Wendong added, "Since TVB is just starting out, there won't be many paid ads in the beginning. Take advantage of the low ad rates to promote your own stuff. It's good for everyone."
"Absolutely," everyone in the room responded.
The Group's internal cooperation across industries didn't just reduce costs—it created immense synergies. Once the TV station became popular, all of Changxing Group's businesses would gain a massive home-field advantage in the Hong Kong market.
"Thank you all," Qin Zhiye said with a slight bow.
Yang Wendong then turned to Zhang Zhiyuan. "Old Zhang, let's hear from your culture company next. You've only been up and running for a short while, but this business is one of our future cores."
At this point, nearly every sector Yang Wendong had entered was either already a key industry—or had the potential to become one.
"Yes, Mr. Yang," Zhang Zhiyuan began. "Changxing Culture currently has three main business lines. The first is comics, the second is derivative products from our comics, and the third is Changxing Film Company."
"Changxing Film is currently under the umbrella of Changxing Culture," Yang Wendong clarified. "If it performs well enough to expand beyond Hong Kong, we'll spin it off into an independent subsidiary."
Some business combinations weren't an ideal fit, but for management purposes, smaller units often had to operate under bigger ones until they were ready to stand alone.
"Understood," Zhang Zhiyuan said. "Our Changxing Comic Weekly is now published in 22 Asian countries. Weekly sales have surpassed 150,000 copies. Last year, the comic magazine generated HKD 4.3 million in revenue.
As for our comic-derived products—stickers, toys, brand licensing for mascots, and more—we earned HKD 7.9 million last year. Profit margins on these are extremely high."
"With IP-based products, profit margins can outstrip even patents," Yang Wendong said with a smile.
Copyrighted content was easier to defend and came with true uniqueness. That meant profit control was strong—often even stronger than in high-tech sectors.
"Exactly," Zhang Zhiyuan nodded. "Changxing Film Company released six movies last year. Combined box office revenue was HKD 2.6 million. Our cinema chain also screened third-party films. Including advertising, our total revenue hit HKD 4.7 million—including our own productions.
As for international licensing, the six films brought in HKD 1.8 million abroad. Several deals are still being negotiated, so we expect more international revenue this year."
"Good. Let Mr. Zou Wenhuai know he's doing a great job," Yang Wendong said with satisfaction. "He'll be getting a big red envelope for his year-end bonus."
Yang Wendong never hesitated to reward those who brought real value. Generous incentives kept his team motivated and ensured the Group as a whole stayed productive.
The film industry, if scaled successfully and managed well, could be shockingly profitable. Once a few hits gained international traction, the sky was the limit.
In his previous life, before Hong Kong's real estate market truly soared, Run Run Shaw was already ranked among the city's ten wealthiest individuals—mainly thanks to Shaw Brothers Studio.
Of course, part of that wealth likely came from his Southeast Asian assets, but Yang Wendong knew that for his own film company to succeed long-term, expanding into Southeast Asia was essential. Establishing a regional cinema network was a necessary step to securing the broader Asian market.
"Then I'll thank you on Mr. Zou Wenhuai's behalf," Zhang Zhiyuan said with a smile.
Yang Wendong turned to the rest of the room. "Everyone here will also receive their year-end bonus. Sister Wang will hand out the checks individually afterward."
"Thank you, Mr. Yang!" Everyone in the room responded with visible excitement.
Glancing at the time, Yang Wendong said, "It's nearly noon. Let's have lunch together. The downstairs restaurant is doing too well—we'd probably have to shout over the noise. So let's eat here on the top floor instead.
Maxim's sent over a variety of pastries, pizzas, and coffee. Everyone, try a bit of everything. If you find something you like, feel free to buy some before the holiday—just keep the receipt, the company will reimburse you."
"Maxim's pastries? My daughter loves those," Wei Zetao said with a chuckle. "But they're so sugary. I'm afraid to let her eat too many."
"Yeah, forget kids—even I love them," someone added. "But I try not to eat too much."
Yang Wendong laughed. "Pastries are great, but it's true—you have to eat them in moderation. These days, more people die from diseases of affluence than from cancer, especially in the West."
In an era when medical science was still catching up, metabolic illnesses were a major threat.
Take diabetes, for example. While insulin existed, it was still extracted from animal pancreas—an incredibly costly process. Even the wealthy could barely afford it, and the purity wasn't great, so overdosing could still be fatal.
Or consider high blood fat and cholesterol levels. These could cause heart attacks or strokes, but with no CT scans or MRIs in this era, early detection was practically impossible. Once symptoms showed, it was often too late.
That's why maintaining a healthy diet and weight was the most important aspect of personal health management. Many ultra-wealthy people were incredibly self-disciplined. In his past life, few of the most prominent internet billionaires were overweight. Meanwhile, working-class people were often too exhausted to manage their health and tended to overeat, leading to obesity.
That afternoon, Yang Wendong met privately with Wang Fengzhi in his office.
"Sister Wang, have a seat," he said with a smile. As the Group's chief financial officer, Wang deserved special respect—even from the boss.
"Thank you, Mr. Yang." Wang Fengzhi sat down and smiled. "This morning, the heads of each subsidiary gave their annual performance reports. Of course, for confidentiality, profit figures weren't discussed.
But each of them has submitted their financials to the Group's central finance office. I've organized the final data for your review."
"Alright, let me take a look." Yang Wendong took the folder and began reading.
Wang Fengzhi continued, "The first page summarizes the revenue and profit for each of our subsidiaries. Revenue figures were shared in the meeting. But profit numbers are highly confidential.
Each subsidiary only knows their own figures. At headquarters, only a few people—myself included—have access to the full picture. Everyone else is limited to data from their own department."
Revenue figures were generally not highly secretive. Internally, many staff could roughly estimate them. Even journalists and analysts outside the company could make educated guesses based on market activity. They might not hit the exact number, but the range would be close.
For instance, if a company's true revenue was HKD 100 million, outside observers might estimate HKD 80 million—not HKD 20 million—because the product categories and average prices were public knowledge.
So there was no need to conceal revenue from top executives in sister companies. On the contrary, announcing it at the annual meeting could serve to boost morale and foster interdepartmental cooperation.
But profit figures were a different story. For non-public companies, profits were almost never disclosed. Internally, only a handful of people knew the truth—and the data was shared with banks only when necessary for loans.
"Looks pretty good," Yang Wendong said, smiling as he flipped through the pages. "Our total net profit this year exceeded HKD 100 million."
The Group's three cash cows were:
Changxing Industries, which posted a net profit of HKD 55.12 million—making it the most profitable unit.Changxing Shipping, which despite heavy debt, brought in high leasing revenue, yielding a net profit of HKD 38.09 million.Changxing Real Estate, which had a net profit of HKD 16.32 million.
These three alone totaled over HKD 100 million in profit. Other businesses added several million to just over HKD 10 million each.
Wang Fengzhi nodded. "Yes, the Group's performance this year significantly outpaced last year."
"I recall Jardine Matheson's financial report mentioned HKD 148 million in net profit for the past few months. Their full-year profit might approach HKD 200 million," Yang Wendong said. "Looks like we still have some catching up to do."
Wang Fengzhi smiled. "Mr. Yang, our actual profitability is already higher than Jardine's."
"Oh?" Yang Wendong raised an eyebrow. "How so?"
Wang Fengzhi explained, "Jardine's net profit includes a large amount of property appreciation—they count that toward their earnings. That's why their profit looks inflated.
In contrast, our Changxing Real Estate division did not include the appreciation of its multi-million square feet of property. That was your directive. If we used the same accounting method, our numbers would be even higher."
"Oh, I see." Yang Wendong smiled. "No problem. According to our plan, we'll start liquidating some non-core real estate assets this year. That will make our numbers look even better next year."
Even in the 21st century, some property companies still counted their real estate appreciation as part of their earnings. In his previous life, infamous fraudster Chen Songqing used this tactic to inflate his company's stock price, which he then pledged as collateral to borrow more money and buy more stock—a never-ending financial loop.
The property market was expected to stall in 1965. Yang Wendong's plan was to slowly cash out of his non-core holdings this year and then wait to scoop up properties at bargain prices when the crisis hit.
"In that case, Changxing Real Estate's profit will surpass that of Changxing Industries," Wang Fengzhi said with a laugh.
"That's to be expected. After all, it's aggregating several years of gains," Yang Wendong replied. "I also estimate that Changxing Shipping's net profit will soar next year—once all our ships are in the water."
He hadn't factored in property appreciation before. But once the real estate was sold, those gains would be fully recognized—and the books would look very impressive indeed.
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