Chapter 165: Wealth Summary of 1959
January 10th, Yang Wendong met once again with Zheng Zhijie to discuss matters regarding the newly established real estate investment company. Although this was just a small-scale trial venture into the property market, Yang still took it very seriously.
He also took the opportunity to formally introduce Zheng to the main leaders of his various business sectors.
By now, his businesses were interconnected enough that they could support each other—particularly the media arm, which could help the real estate company with advertising and promotion.
At noon, everyone went to a nearby hotel for a lavish meal before parting ways and returning to their respective posts.
Back at the office of Changxing Industrial, just after he sat down, there was a knock at the door. Knock knock knock~
"Come in, Sister Wang," Yang Wendong said with a smile when he saw who it was. The visitor was none other than Wang Fengzhi, the head of the financial department at Changxing Industrial.
"Good day, Mr. Yang." Wang greeted with a warm smile.
"Please, have a seat." Yang gestured to the chair across from him.
"Thank you." Wang sat down and said, "Mr. Yang, as per your instructions, I've completed a thorough review and consolidation of all financial and asset data across your businesses. Here is the full breakdown."
"Great, thank you." Yang smiled as he accepted the folder from her.
If 1958 was Yang's year of entrepreneurship, then 1959 was the year he took off.
That year, the Changxing Industrial Post-it Note factory officially went into full production and began steadily meeting demand in the U.S. market. At the same time, adhesive hooks and spin mops were also introduced and launched into their respective markets.
The boom in manufacturing brought in significant revenue, giving him the financial power to establish a newspaper, a radio station, and even build a small commercial property in Central.
As operations expanded and loan involvement increased, the group's finances had to be carefully reviewed on a regular basis.
Wang continued, "As of now, your biggest asset remains Changxing Industrial. This month, the company's net profit is expected to break 800,000 HKD.
Most of this still comes from the Post-it business. However, sales of adhesive hooks in Japan and Southeast Asia are now bringing in substantial profits. Spin mops are currently contributing less, and glue traps are seeing a seasonal dip due to winter in the Northern Hemisphere."
Yang glanced at the numbers and asked, "So next year, we should be breaking a million HKD in monthly net profit?"
"Yes, that's guaranteed," Wang replied. "It could even be higher. Mr. Wei is already preparing for Phase Two of the factory. Once it's completed mid-year, Post-it output will double, which will allow us to supply the European market as well. That alone would double profits for that line.
As for adhesive hooks, even though we're not producing them directly, our partner suppliers are ramping up production—some are even building new factories. That growth will actually outpace the Post-it expansion."
"Good," Yang said with a smile, flipping to the expense section of the report. "Changxing is certainly making money, but our expenses are scaling pretty fast too."
Wang replied, "Mr. Yang, Hong Kong Chinese Daily hasn't reached profitability yet, but circulation is steadily climbing. I believe it will turn profitable soon.
As for the radio station, it hasn't started operations yet, so I can't give an accurate projection.
The biggest portion of expenses, of course, is debt repayment."
Yang nodded, eyes scanning the figures. "We still owe 8.2 million HKD in external liabilities? That includes 3M's loan?"
"Yes," Wang confirmed. "The 3M debt is a one-year term loan, not a monthly repayment like our bank loans. It's due in April this year, or we can let them deduct it directly from future procurement payments. That loan is 530,000 USD—around 3.4 million HKD.
We also owe 2.8 million HKD to Liu Chong Hing Bank and 2 million HKD to Hang Seng Bank. We've been steadily repaying these, and the remaining balance is 3.9 million HKD.
Finally, there's the Hong Kong Chinese Daily building—land purchase, construction, and interior renovation altogether cost 950,000 HKD. We've only repaid a small portion; 900,000 HKD remains outstanding."
"That's quite a bit," Yang admitted with a smile. "8.2 million HKD is no small sum."
Wang added, "But we currently have 4 million HKD in the bank. Most of that came from Changxing's recent profits, and part of it is unused loan capital."
Yang nodded. "So even without expansion, we can repay all loans within six months?"
"Yes," Wang confirmed. "From that perspective, our debt ratio isn't high.
And this is just the tangible asset assessment. If we were to factor in the intellectual property value of the Post-it note, adhesive hook, and glue trap patents, I'd estimate them to be worth over 10 million HKD alone."
"No need to count those for now," Yang waved it off. "I'm not planning on monetizing them yet."
He paused, then said, "Mr. Wei's preparing to take more loans for Phase Two, and I'm planning to enter real estate. Our dependency on banks will keep increasing. What's your view on that?"
Wang thought for a moment. "Leveraging bank funds for expansion is the norm. But no matter how many sectors we cooperate with banks on, we must keep their accounts completely separate.
Changxing Industrial is one entity. Your new real estate venture must be another. Inject funds into it independently, and let it manage itself with its own books."
"Exactly," Yang nodded. "I've been thinking the same. Right now, your team is still handling the newspaper's finances. But as that business grows, it'll need its own department.
Real estate, being even more capital-intensive, definitely has to operate independently."
"Yes. In fact, that's how most Hong Kong conglomerates function," Wang said. "I've heard that some real estate firms run each property as a separate business. Even some shipping companies treat each ship as a standalone financial entity."
"I've heard that too," Yang replied. Then he added, "But Sister Wang, while the companies operate independently, I want to establish a central financial department that monitors and audits all subsidiaries. What do you think?"
Wang nodded. "That works. Subsidiaries can manage their own teams, but ultimate audit authority should rest with the parent company."
Yang smiled. "Exactly. And I'd like you to lead that department. Interested?"
As a business grows, the headquarters must retain control over key areas—like finance and HR.
Over time, more internal controls like compliance and anti-corruption measures would be needed to ensure oversight.
But that was still far in the future. Right now, with only a few subsidiaries, financial control was enough.
HR could be delegated to the managers—for now.
Wang was thrilled. She was well aware of the company's future potential. "Thank you, Mr. Yang. I'd be honored. I'll need a little time to transition out of my role at Changxing Industrial."
"Of course," Yang nodded. "Our current core is still manufacturing. You'll stay with Changxing for now.
Once the other businesses scale up, I'll form a group company. That's when the central departments will branch off. In the meantime, train a successor for Changxing's finance team and help identify future candidates for the group office."
"Understood," Wang said, clearly excited.
Yang glanced at the report again. "You've valued Changxing Industrial at 10 million HKD?"
"Yes," Wang replied. "Once Phase Two is complete, our monthly profit will reach 1.5 million HKD. Even after expenses, we'll be netting at least 15 million HKD per year.
Using standard earnings-to-valuation multiples, 10 million is conservative—and that's not counting our IP."
"Fair enough. Post-its alone are worth far more," Yang said with a smile. "Just remember—the company's revenue and profit data are top secret. Aside from the finance team and managers like Old Wei, no one else should know the numbers."
In his past life, companies like 3M had core businesses worth hundreds of millions of dollars. Though Yang didn't have their distribution power—or American government backing—Post-its were still a massive market.
Even in developed places like California and Hong Kong, many people weren't using them yet. There was still huge growth potential.
"Understood, Mr. Yang," Wang nodded. "Our finance team has strict confidentiality policies. Even our internal staff only see their section's figures.
They might guess we're very profitable, but they'll never know exact numbers."
"Good," Yang said with satisfaction.
After all, in a company, certain information would always leak through the cracks. The goal wasn't secrecy—it was containment. Keep the core figures limited to those who needed to know.
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