Return to 1958 and build a century-old giant

Chapter 885 Progress of Domestic Investment

Nokia is quite large now, after all, it's a century-old company with multiple industries in Finland;

However, he doesn't need many shares at the moment, and the amount of money involved is at most a few tens of millions of US dollars, so he won't participate. It's not a strategic investment, so there's no need to waste his time.

Just have your subordinates handle it, and then arrange for another team or a third party to review it afterwards;
As a company grows larger, it needs a complete system in place to ensure that it can operate normally, honestly, and fairly without the owner's involvement.

He will not participate unless it is a future strategic investment or a major investment at the last minute;

In Finland, besides Nokia, there are other large companies, but their brand recognition is not high in the future, so Yang Wendong naturally wouldn't consider them. After making the arrangements, he returned to Hong Kong.

However, before leaving Europe, he told Barney, "Barney, you know about NBA basketball in America, right?"

"I know you're interested in basketball?" Barney asked curiously.

Yang Wendong countered, "Don't you like it?"

Barney shook his head and said, "I don't really like it. I prefer baseball and football."

“These two balls are your favorites in America.” Yang Wendong smiled and said, “I like basketball, and the NBA has been doing very well in recent years. I would like to ask you to acquire an NBA team.”

The culture of the United States differs from that of other developed countries in many ways;

For example, in terms of units of measurement, the length in the United States is measured in feet, the area in the same unit, the volume in gallons, and the weight in pounds and ounces; the temperature is measured in degrees Fahrenheit; pipes are measured in imperial units, and even natural gas is measured in British thermal units. The conversion between many units is not even decimal, which is simply outrageous.
In terms of sports, they prefer baseball and rugby, which have very complex rules that are different from anywhere else in the world, making them unique and even absent from the Olympics.

Fortunately, basketball is a bit more normal. It's popular in many parts of the world, and Americans are quite strong in basketball, which fits my future advertising needs.

Barney thought for a moment and said, "Okay, I'll go ask. Do you have any suitable targets?"

Yang Wendong said, "It would be best if it were in a big city, then the price would be easier to negotiate. If it could be the Los Angeles Lakers, that would be even better. If not, we'll look for other teams."

Los Angeles is also the home base of his entertainment and electronics industries, making it easier for him to acquire the Los Angeles Lakers.

“Lakers? Okay, I’ll go ask them,” Barney agreed.

Yang Wendong smiled and said, "Alright, if it succeeds, then we'll stick to the old rules."

Investment banks naturally expect returns for their work, and often the prices are not low, but as long as it helps them achieve their strategic goals, it is worthwhile.
On March 10, Yang Wendong returned to Hong Kong;

After resting for two days, he convened an internal meeting to learn about the recent developments in the company.

"Mr. Yang, the Hong Kong Electric Company has been successfully split up and is now divided into three companies: Hong Kong Electric, Ka Wong Properties, and Cheung Hing Energy. The first two are still listed companies, while the latter is our independently established energy company. I have already invested HK$2 million and am preparing to invest in a power plant in the deep sea," Fang Xianming reported.

Yang Wendong asked, "During the spin-off process, were there any conflicts or disputes among the shareholders?"

Fang Xianming replied, "There are some, but it's not a big problem. Some people are optimistic about our overseas energy investments and want to exchange for these shares, but we didn't give them that opportunity. They can only choose the old Hong Kong power generation business and the previous real estate of HK Electric."

"It seems that quite a few people do have some discernment," Yang Wendong said.

Fang Xianming said, "These are the smart people. If they are not confident in their own investments, they will follow the investments of successful people. Hong Kong Electric is currently just generating electricity in Hong Kong. Although it is stable, it can only be stable for now. As for Jia Hong Real Estate, its potential is also limited. Only Changxing Energy may have unlimited potential in the future."

Yang Wendong said, "Yes, I am indeed planning to let Changxing Energy participate in the energy business on a large scale in China. It is better to keep it as a sole proprietorship for the time being, which will make it easier for me to inject funds. Otherwise, it would always be troublesome if there were other shareholders."

The advantage of being a listed company is that it has reasonable management and control processes, but these processes also mean that the response is slow.

As a time traveler who knows the future, what he naturally needs is speed. Some businesses in the mainland need to be invested in as soon as possible, otherwise, if he misses the opportunity, it may be completely lost.

Fang Xianming said, "Then, I'll prepare to have the new company sign a contract with Shenzhen City."

“Alright, you guys handle this. First, open one in the mainland to test the waters, learn from the experience, and if it’s successful, then invest in other places,” Yang Wendong nodded and said.

The mainland will definitely need electricity in the future, not only for industry but also for residents. He remembered that in the 90s, there were frequent power outages, and every household had large rechargeable electric lights.

“Okay.” Fang Xianming agreed, then asked, “Mr. Yang, there’s one more thing. Some government officials from SX Province in the mainland have come to visit our company and said they hope we can invest in the coal mines there and develop them together.”

"Is foreign investment allowed in the development of coal mines in Shanxi?" Yang Wendong asked in surprise.

Fang Xianming replied: "Yes, the central government has this policy in the mainland, which allows foreign investment to participate in the development of mineral resources with the local government, but some special mineral resources are not allowed, among which coal mines are allowed."

"The mainland side probably also wants to utilize foreign investment as soon as possible to develop the underground coal mines, and then use them for power generation or export to earn foreign exchange." "In that case, we can go and investigate locally, and if there are suitable opportunities, we can invest." Yang Wendong thought for a moment and said, "However, we don't have a team for this, so let's focus on investment for now and not consider participating in operations, just doing financial supervision."
In addition, our own power plants also use coal, so using our own coal can reduce some costs.

Fang Xianming said, "Yes, but there are still some problems. The coal investment still requires the construction of railways, otherwise it can't be transported out."

"We can't possibly get involved in the railway matters, can we?" Yang Wendong asked in surprise.

The railway industry in mainland China holds a higher status than the oil industry. While foreign investment is permitted in highways, he had never heard of foreign investment allowed in railways; after all, railways are related to national defense and security.

Fang Xianming said: "No, the Shanxi government's idea is that we develop the coal mine together, and then the local railway bureau borrows money from banks in Hong Kong to build the railway. We can pay off the debt slowly after the coal is produced."
Furthermore, once the railway is built, it can also carry other types of transport or passengers, which can also generate revenue.

“I remember that Xiao Rizi had a similar cooperation with Shanxi, right?” Yang Wendong asked.

Fang Xianming said, "Yes, a Japanese energy group borrowed money to build a railway from Shanxi to Qinhuangdao Port. The railway that Shanxi wants us to borrow money to learn about this time also leads to this railway and then delivers goods to Qinhuangdao Port."

“This is also a potential area for cooperation. It’s not just this project; we can consider other similar projects as well.” Yang Wendong thought for a moment and said, “Inform Hang Seng Bank and have them seriously investigate this matter. If there is a need for railway loans in China, then we can consider it. This business will not be a loss for the bank.”

Changxing Group is already the major shareholder of Hang Seng Bank, but in accordance with the promise made at the time, he still allowed the Ho family to control Hang Seng Bank. Therefore, in name, Hang Seng Bank is not a subsidiary of Changxing Group, and many things are still decided by the Ho family.

Fang Xianming replied, "Okay, I will inform Mr. He."

Yang Wendong said, "If there are similar businesses in the mainland in the future, and they think they are worthwhile, then we can consider investing or financing them. But we will not get involved. Our energy is also limited. We just need to do a good job in the power generation industry in the mainland. As for the others, we will provide foreign exchange funds to the mainland and let them take care of themselves. We will just supervise them a little."

There are too many industries in mainland China that can be profitable in the future. Even if I have a lot of talented people under my command, it is impossible to participate in everything. That is unrealistic. Even in a country, many aspects of the economy are handled by private enterprises.
Our core industries consist of about ten existing businesses, and we will expand horizontally and vertically along the entire industry chain, using these ten businesses as the center.
For other industries or more complicated matters, an investment model or cooperation with a professional company is the most suitable operating model, rather than managing everything yourself.

Fang Xianming said, "Okay, I know what to do."

Yang Wendong then looked at Wei Zetao and asked, "How is the industrial park in Shenhai City doing?"

Wei Zetao replied, "The first phase has been completed, and a lot of equipment has been shipped from Hong Kong. We are currently in trial production, and we also need to test each product. Once we are sure there are no problems, we will gradually start exporting."

“Okay, now that we’ve changed locations and workers, we must pay close attention to quality.” Yang Wendong nodded and said, “You also need to summarize the problems and experiences from cooperating with the mainland side to facilitate future investments in other factories.”

Changxing Industrial's products are the simplest. Currently, the main products shipped to the mainland for production are small plastic parts, adhesive hooks, and some household appliance parts, etc. The requirements are relatively low, so we feel more at ease having them produced in the mainland.
Once we're sure there are no problems, we can gradually move other industries over.

Wei Zetao smiled and said, "Don't worry, Mr. Yang, the person in charge of the Shenzhen factory will go back to Hong Kong every week to report to me and summarize."

"Okay, you should also communicate with Honor and Watsons." Yang Wendong smiled, then looked at Zhou Haoran: "Old Zhou, how are your factories in Beijing and Shanghai doing lately?"

Zhou Haoran replied, "Mr. Yang, the production capacity of the Coca-Cola and instant noodle factories has already been maximized. The domestic demand for Coca-Cola and instant noodles is too high, and the supply is completely insufficient to meet the demand."
So I'm planning to build a second-phase factory, expanding the scale further. However, I want to change the production location, especially for Very Cola. The transportation costs for this cola are too high in some inland areas, where transportation is inadequate. If waterway transportation isn't possible, the freight costs will be higher than the cost of the cola itself.

Yang Wendong nodded and asked, "Where do you want to build it? In the deep sea?"

Let alone now, even decades from now, when China's transportation is the best in the world, transportation costs will still account for about 20% of beverage costs. In this era, transportation is poor, trucks are expensive and prone to breaking down, so it wouldn't be surprising if they account for more than 50%.

Zhou Haoran said, "I have this idea, but it's not just about the deep sea. I also want to build one in Hankou. Hankou is located in the central part of the inland area, close to many inland provinces. If we build it here, the transportation costs in the central inland region will be reduced a lot, and it will also ensure that more people can buy our beverages."

“Okay, but wouldn’t that require a joint venture?” Yang Wendong countered.
Currently in China, apart from the four special economic zones, investments in other cities still require joint ventures with local enterprises.
Of course, there are costs to having a sole proprietorship in the special economic zone. Unless it is a product that must be imported into China, it cannot enter the domestic market unless it is negotiated separately.

There's always a trade-off. The purpose of Very Cola and instant noodles investing in mainland China is to target the domestic market, so joint ventures are normal.

Zhou Haoran said, "Yes, we need to form a joint venture, but I don't think that's a big problem, because even if we only have 49% of the shares, we can still earn 70% to 80% of the actual profits."

"Okay, then you can make your own arrangements. Just let me know when you have the results," Yang Wendong nodded and said.
There are actually many ways to circumvent the 51% state-owned enterprise control strategy in mainland China. Many multinational car companies in the past made a fortune by relying on this strategy, leaving only 10 to 20 percent of the profits for local state-owned enterprises, and almost destroying their determination to conduct independent research and development.
In fact, no matter what strategy is used, the party that controls the technology will ultimately make a lot of money. This is fair, as technology is the driving force behind scientific and economic development.
Of course, cola and instant noodles don't require much technology, but over time, they develop their own methods and skills.

Zhou Haoran replied, "Okay, Mr. Yang."

"Guoyuan, how's your investigation of domestic electronic component companies going?" Yang Wendong asked He Guoyuan, who was sitting in the back.

He Guoyuan replied, "Mr. Yang, over the past few years, I have arranged for people to inspect hundreds of electronics factories in China. They are basically the leaders in their respective regions, and some have already begun to try supplying goods to Hong Kong."

Yang Wendong nodded, then looked at Fang Xianming and said, "Old Fang, you should cooperate with Guoyuan again. For any company they think is worthwhile, try to invest in it, around 20% is fine, the more the better."

Fang Xianming immediately agreed, "Okay, Mr. Yang."

PS: Please give me a monthly ticket
(End of this chapter)