A century-old wealthy family that rose from Shanghai

On the eve of the Spring Festival, Chen Guangliang and Chen Wenkai, together with the core senior executives of the group, convened separate meetings for the four major groups.

The Yangtze River Industrial Group has four major subsidiaries. These four groups maintain a high degree of independence. The forced integration of them has led to mismanagement and a chaotic organizational structure.

The four major groups are: Xinfeng Textile Group, Rongchang Heavy Industry Group, Huatai Group, and Midea Group.

Their first stop was Xinfeng Textile Group, which is located in Xinfeng Textile Industrial Park in Tsuen Wan.

The Sun Fung Textile Industrial Park, located in Tsuen Wan, covers an area of ​​100 million square feet and is situated near Castle Peak Road. As Tsuen Wan gradually develops into a new town, converting factories into residential buildings is becoming increasingly common.

The site of the Xinfeng Textile Industrial Park is equivalent to half of Taikoo Shing, and the actual plot ratio could be even higher; if it is developed into a large housing estate in the future, its value will likely be enormous.

Although this is the trend, it is impossible to develop real estate before a suitable new site is found for Xinfeng Textile and the industry is relocated.

In the conference room, Lin Jianyun, General Manager of Xinfeng Textile Group, gave a comprehensive work report.

The industrial structure of Xinfeng Textile Group has undergone some changes: the revenue ratio of textiles: ready-made garments: brands has reached 2:6:2.

However, looking at the ratio of textiles to apparel, the apparel industry is three times larger than the textile industry, which is unprecedented. This also reflects the trend of Hong Kong's industrial development.

However, looking at the overall proportion, the brand's growth is very obvious, previously accounting for only one-tenth of the entire group.

There is also a special statistic: in Africa, the ratio of textiles to garments is 4:1; that is to say, in the textile industry, Hsin Feng Textile Group mainly sells fabrics.

Of course, investments in African countries such as Nigeria only account for slightly more than 10% of the group's total, which is not a very large amount.

Chen Guangliang asked directly, "What are your plans for future development?"

He can only offer some constructive suggestions; the overall operation still needs to rely on the management team.

Lin Jianyun immediately said, "Currently, the main growth point is in branding. After all, we have already reached the pinnacle of the traditional textile and garment industry. Therefore, we want to invest a huge sum of money to expand the development of Lacoste in Asia, especially in the Japanese market."

In Hong Kong, Lacoste is a symbol, much like the Bauhinia flower, worn by many middle-class families since childhood. Similarly, Lacoste's years of development in Asia have proven its ability to expand beyond Hong Kong.

How much funding is needed?

Lin Jianyun said, "One hundred million."

Chen Guangliang replied without hesitation, "Sure. You can finalize the detailed plan later, have Wen Kai review it, and then we can begin implementation."

Lin Jianyun nodded and said, "Okay."

He knew that, under normal circumstances, the boss rarely made an appearance.

Lin Jianyun then continued his report: "In fabric research and development, our denim has achieved great success, with large-scale exports generating substantial profits. As for fleece, we have preliminarily demonstrated its characteristics and advantages. Composed entirely of polyester, it has a soft touch and is an ideal choice for winter warmth. It is lighter than wool, warmer than wool, and cheaper than wool; in addition, it has excellent composite properties, allowing it to be combined with various other fabrics to further enhance its warmth."

Chen Guangliang was overjoyed. The successful development and sales of denim only showed that Xinfeng Textile Group was doing very well in Hong Kong; but once the development of fleece was successful, Xinfeng Textile Group would have a place in the world.

The profits from this patent alone could potentially earn Hsin Feng Textile Group hundreds of millions of US dollars.

How long do you expect it will take to develop fleece?

Lin Jianyun said, "We will be able to fully master this technology within three years."

Since the project was initiated, Xinfeng Textile Group has mobilized its best fabric and chemical R&D engineers to invest in the research and development of fleece; it has even hired top talents from outside to participate in the project.

It's very simple. Compared to the R&D costs, the patent value of fleece could be hundreds of millions of US dollars. Of course, besides the patent fees, Hsin Feng Textile can earn even more because it can't produce it itself.

"Yes, this is also a growth opportunity for Xinfeng Textile Group!"

Chen Guangliang added, "Uniqlo also wants to expand overseas, but it can start a step behind Lacoste and develop gradually."

"Ok"

Next, they discussed more work.

For years, Hsin Feng Textile Group has been a stable source of profit for Chang Gong Group. Although Chen Guangliang has long believed that Hsin Feng Textile Group belongs to a traditional industry and its future is uncertain, its potential may not be great.

However, Chen Guangliang knew that Xinfeng Textile could at least maintain its role as a "stable source of profit for Changgong Group," and that if it could break through with its brand in the future, it would be even more successful.

The initial patent for a rolling suitcase, combined with the export of those suitcases, alone would have made them a medium-to-large-sized enterprise in Hong Kong. And Hopewell Zippers is also a large company.

Even during last year's oil crisis, Sin Fung Textile Group still made a profit of HK$2 million.

Chen Guangliang and Chen Wenkai's second stop was Rongchang Heavy Industry Group.

The new president is Liu Zhaoxian, the former general manager of the yacht manufacturing plant, while Sun Dehe, the former general manager of Rongchang, has retired honorably and now focuses on writing books.

Chen Guangliang strongly supports Sun Dehe's research and writing in the steel industry, and hopes to return these materials and achievements to the motherland when the opportunity arises, since he has already borrowed them for many years. Tong Runfu, also in the textile industry, focuses on writing and research after retirement.

Rongchang Heavy Industry Group currently comprises three major industries: yacht manufacturing, metal smelting, and machinery and hardware.

Liu Zhaoxian said, "After the oil crisis, Rongchang Yacht's exports plummeted by 20%, with only 2050 yachts exported last year. Fortunately, the value of Rongchang Yachts increased slightly, and the proportion of mid-to-high-end yachts increased. In addition, the acquired Riva Yachts has performed well, which has made up for the reduced profits from domestic yacht exports. At the same time, Riva Yachts' engines have fully covered Rongchang Yachts."

Riva Yachts, a long-established Italian yacht manufacturer with over a century of history, was acquired by Rongchang Yachts in the late 1960s. It immediately entered the manufacturing of new luxury yachts featuring fiberglass construction, duplex cabs, and flybridge systems, experiencing rapid growth. Simultaneously, Riva Yachts also began producing engines for the entire group.

As a result, engine manufacturing can only be mainly carried out in Italy, while some can be assembled in Hong Kong.

Chen Guangliang said, "Inflation is severe in the United States and Europe, and the yacht industry is expected to be in a slump for several years. You should be prepared."

Liu Zhaoxian and the others were surprised, but they quickly calmed themselves down and believed that their boss's judgment was correct.

In reality, it might not be just a few years; the yacht industry wouldn't experience its second major boom until the 1980s. Next came the smelting industry. Rongchang Heavy Industry mainly smelted steel, with 70% used domestically and 30% exported. In addition, they smelted aluminum alloys and copper, but mainly supplied them for zippers and aluminum alloy doors and windows.

The smelting industry had little future, and in the 1980s they planned to relocate to Tuen Mun, or even move the entire industry to the mainland for development.

Finally, there's the machinery and equipment, which is quite complex, encompassing all sorts of machinery and equipment, including hardware, motors, zipper-related machinery, sewing machines, and so on.

Rongchang Heavy Industry's profit last year was HK$1.5 million, which is still quite good.

For his third stop, Chen Guangliang visited Huatai Group.

This is also one of Hong Kong's major employers and a toy giant that directly competes with the Japanese toy industry.

Barbie, My Little Pony, and Transformers products worldwide are all manufactured by Huatai Group, employing tens of thousands of people.

Huatai also owns its own toy IPs—building blocks, Rubik's Cubes, train tracks, battery racing cars, claw machines, etc.—and its own retail network—Kidswant.

Chen Guangliang and Chen Wenkai first inspected the production workshop, and then held a management meeting later. The difference this time was that Zhang Yuzhen, the president of the comic book publishing house, was also present.

This reflects the growing influence and increased revenue of 'Comic World Publishing House'. Last year, 'Comic World' weekly magazine began serializing 'Mobile Suit Gundam', which generated a great response upon its release, with sales exceeding 16 copies, surpassing any other magazine in Hong Kong.

This is not because Hong Kong's market is larger than before, but because "Comic World" cultivated Hong Kong's comic market; moreover, Taiwan and Singapore also began to sell "Comic World" through unofficial channels.

After listening to General Manager Su Dongsheng's work report, everyone was delighted. Thanks to its OEM manufacturing of Mattel toys, Huatai Toys' performance has been growing every year and is quite impressive.

A moment later, Chen Guangliang asked, "What are the specific details about the figurine department?"

A manager immediately began to explain: "Since the popularity of 'Fist of the North Star,' our high-quality and meticulous craftsmanship has always been on par with Japan. Currently, our figures are mainly peripheral products related to 'Fist of the North Star,' 'City Hunter,' and other similar works."

Chen Guangliang then said, "The figurine industry is a promising and rapidly growing industry, and the group should attach great importance to it. Of course, every IP of the comic book magazine is crucial, and the two should develop in tandem. On the other hand, the serialization of 'Mobile Suit Gundam' and its model kit toys need to be developed as soon as possible, which will be the responsibility of the figurine department, and the figurine department will be listed as a first-level subsidiary of Huatai Group."

"Yes, Mr. Chen."

This is a grand strategy, a long-term plan.

Even when Bandai was in decline, Mobile Suit Gundam and Dragon Ball still made a profit of 100 billion yen (RMB) annually from their figure collections.

Mobile Suit Gundam has been serialized for a year now, and Dragon Ball is expected to begin serialization in 1978. These will all be treasures of Huatai.

"Mr. Chen, there's a comic book production company that wants to obtain the anime license for our 'Fist of the North Star'!" Zhang Yuzhen brought up a matter.

He also wanted to take this opportunity to show off.

Chen Guangliang stated directly, "No. We will produce the animation ourselves, as the current level of animation production in Hong Kong is too low."

In 1959, the owner of a paint factory, "Zhonghua Paint Factory," funded an trip to Hong Kong with representatives from the American production company UPA (United American Animation Studios). Among them was Steven Boasastow, the founder of UPA, who purchased equipment and trained 15 animators for the paint factory. (Note: UPA was founded by a group of former Disney employees and was a completely different company from Disney in style. Although its existence was short-lived, it had a significant impact on the development of independent television animation in the United States.)
UPA training officially began in 1960, but unfortunately, the trainees soon left Hong Kong due to disagreements over pricing. In 1961, the Chung Hwa Paint Factory disbanded its animation department, but retained 15 animation talents who were determined to dedicate themselves to the industry. They became the backbone of Hong Kong's animation development in the future.

The 15 animation talents later formed three companies: Oriental Cartoon Animation Company, Hezhong Cartoon Animation Company, and Hong Kong Animation Company. The establishment of these three animation companies signified that Hong Kong animation was beginning to take shape and that animation was gradually developing into an industry.

But clearly, these companies were unqualified in Chen Guangliang's eyes.

Moreover, he will have a television station in the future, so he naturally won't easily grant animation copyrights.

Unless it's a large market like Japan, he would consider licensing to Japanese companies.

Chen Guangliang then said, "Since President Zhang has brought it up, let's set up another department—the animation production department. Of course, we need to train talent first. We'll go to Mattel later and invite people from the US to Hong Kong to train a group of people for us. At the same time, we'll also recruit locally in Hong Kong. We'll invest for the first three years. Once our level has improved, we'll consider output and collaborate with TVB to broadcast it."

Su Dongsheng immediately replied, "Okay, we'll make preparations as soon as possible."

As high-level personnel, everyone knows that this is a grand strategy.

Take the comic book industry as an example. Despite the fact that Manga World's works are best-selling and its influence has reached overseas, it has only just achieved revenue balance.

The comic artists at Manke World earn money, which they use to train talent and expand into overseas markets, especially since the previous losses are only now being slowly recovered.

Back at the headquarters of the Yangtze River Industrial Group, Chen Guangliang took out the outline and some detailed outlines of "Dragon Ball" from the safe and handed them to Chen Wenkai.

"The IPs of 'Mobile Suit Gundam' and 'Dragon Ball' are extremely valuable, which is why 'Dragon Ball' needed to be serialized in 1978. The value of these manga IPs lies not in the 1970s and 80s, but in the future."

Chen Wenkai carefully accepted the documents. He noticed that his father only gave him such detailed instructions when discussing the comic book and electronics industries. This clearly demonstrated that his father placed the greatest importance on these two sectors.

He now has a basic understanding of the importance of intellectual property (IP) because he has visited Mattel many times; they are the real experts in IP. But since his father said that Comic World's comic IP has great potential, he believes it will truly develop in the future.

"Okay, I'll go lock it in my safe and give it to the comic book company in 1977."

Chen Guangliang nodded and continued, "Have you noticed that Taiwan, Singapore, and other places are starting to show interest in our comics? This is cultivation. So, we should find ways to sell our comic publications overseas through various channels, even if it's pirated locally. It's simple: IP isn't a patent, and it doesn't have an expiration date. In the future, the merchandise related to comics will be our harvest, and right now we're just cultivating the market."

Chen Wenkai admired his father's courage. While they naturally abhorred piracy, his father had a long-term vision regarding this matter.

"I understand"

This industry is part of Chen Guangliang's "large cultural industry," so he pays close attention to its development. He even reads "Manga World" and occasionally offers suggestions to the magazine.

On the contrary, Chan Kwong-leung has no interest in current TVB and RTV programs and rarely watches them.

These cultural industries already exist in Hong Kong, but he needs to add cultural industries that Hong Kong doesn't have – "Hong Kong culture + comics".

"A large-scale cultural industry" and "a technology industry"—this is the ultimate gift Chen Guangliang brought to Hong Kong. (End of Chapter)