Chapter 308: The Profiteering Power of Cultural Industries
"Hahaha!" Saunders burst into laughter. "Excellent! Mr. Yang, you certainly have ambition. If you truly intend to participate in the land auction, HSBC will fully support you."
Yang Wendong raised an eyebrow and asked, "What about Jardine? Isn't HSBC backing them instead?"
"To me, there's no difference between British capital and Chinese capital," Saunders said with a calm smile. "Jardine is larger in scale, yes, but I believe in your potential, Mr. Yang—or rather, I believe in the potential of Chinese capital."
"Alright," Yang Wendong nodded without pressing further. "I'll need to look into the details of the land first. Once I've confirmed things, I'll get back to you."
"No problem," Saunders said, nodding in agreement.
After parting with Saunders, Yang Wendong returned to Changxing Tower and called in Zheng Zhijie to inform him of the matter.
"I haven't heard any news about this land yet," Zheng Zhijie said. "It's likely still under confidentiality. I'll go look into the property records immediately."
"Good." Then Yang Wendong asked, "Is there some tension between Jardine and HSBC lately?"
Saunders' words today had hinted at something more. It seemed he wasn't exactly inclined to support Jardine anymore.
Zheng Zhijie replied, "I've heard a bit about that too. Supposedly, HSBC's size has been expanding rapidly over the past few years, and it's started to threaten Jardine's position as Hong Kong's number one conglomerate. As a result, Jardine has been gradually pulling away from HSBC in several investment projects and turning to other banks instead."
"A fight for the number one spot, huh?" Yang Wendong nodded.
That made sense. In this tiny city of Hong Kong, such clashes happened often—like the early 1980s battles over who was the number one shipping tycoon, or the fierce competition between Jardine and HSBC for the top conglomerate position, and again between Hutchison and Jardine for dominance in foreign trade.
All for a single word—"number one"—many powerful individuals and consortia had clashed intensely.
Zheng Zhijie added, "A few years ago, Jardine was still clearly larger than HSBC. But now, thanks to HSBC's increasing collaboration with Chinese-owned factories, its size has caught up. With new partnerships in shipping, plus its traditional strength in British capital businesses, it looks like it'll surpass Jardine soon."
Yang Wendong laughed. "Compared to HSBC, the leaders at Jardine just don't have the same capability. Their valuation may look strong on paper, but their overall business hasn't really grown much."
As his own industrial empire expanded, Yang Wendong had naturally begun to observe the other major financial groups in Hong Kong—especially those he would eventually compete with. Jardine, Swire, and others topped the list.
Swire focused on aviation, beverages, shipping, sugar, and trade.
Wheelock had its hands in retail, shipping, trade, real estate, and ports.
These were relatively streamlined—each had a few core businesses. But Jardine was different. It had investments in everything: shipping, trade, real estate, ports, mining, agriculture, retail, logistics, food service, hotels—you name it, they did it. And all at a considerable scale.
For a conglomerate of this size, having a wide range of industries wasn't a problem. But when none of them were managed particularly well, that was a problem.
Of course, Jardine had incredibly deep foundations. Even if a good portion of its overseas investments lost money, the company as a whole still appeared prosperous.
Zheng Zhijie nodded. "Yes, HSBC's growth in recent years is obvious. Saunders is aggressively expanding partnerships with Chinese capital. No wonder Jardine is trying to pull away."
"I doubt it'll be that easy," Yang Wendong replied. "But for us, it's a good thing. It gives us a chance to tap into HSBC's capital and compete with Jardine in more fields."
If Changxing Group had only focused on exports and shipping, it wouldn't have clashed much with local Hong Kong conglomerates.
But the internal Hong Kong market was tremendously valuable. Outside of electronics and the internet, no other sector could compare. There was no way Yang Wendong was going to give that up.
And that meant inevitable conflict and competition with the British-backed monopolies in Hong Kong.
If he had HSBC backing him, it would be a huge advantage—both financially and politically.
Zheng Zhijie added, "Right. Jardine tried to force us out of the retail supermarket business by leveraging their capital and pricing. We had to give a little ground.
But that's only short term. As the industry grows, space in Hong Kong will become more limited, and competition will get direct again. If we can align with HSBC's interests against Jardine, that would be very beneficial."
"Exactly. And most importantly, we don't have any conflicts with HSBC," Yang Wendong said.
He wasn't planning to enter the banking sector in the short term. The financial industry still required political capital that Chinese businessmen didn't yet have—not just money.
Besides, many of his current industries required HSBC's cooperation. If he started a bank now, it would hurt his other businesses.
He would wait for the right time. The opportunity would come eventually.
Zheng Zhijie added, "I'll also look more into the current state of Jardine's relationship with HSBC."
"Good," Yang Wendong said. "But we don't need to bring this up directly with HSBC. Just understanding the situation is enough. No need to say anything explicitly."
"Understood," Zheng Zhijie replied.
Time flew by, and it was now 1963.
It had been five years since Yang Wendong arrived in this era of Hong Kong.
January 3.
After waking up, Yang Wendong took a 30-minute jog along a private internal road near his home—a key part of maintaining his health: moderate exercise.
After a quick rinse, he sat down at the breakfast table, where milk, bread, buns, fried eggs, and several kinds of fruit were already laid out.
After a few bites, Bai Yushan and Su Yiyi came in. Yang Wendong handed each of them a fried egg. "These eggs are really good today."
"Mm." Su Yiyi immediately separated the egg white from the yolk and began feeding the white to her son.
Little Zhiwen, however, looked like he'd just woken up and didn't feel like eating.
Yang Wendong handed him a bottle of milk, which the boy began sipping.
"This kid is still too picky," Yang Wendong said with a smile.
Su Yiyi replied, "That's because the house is full of good food. And you're always bringing back snacks. Of course he's picky."
"Yes, that's on me." Yang Wendong nodded. He did spoil his son a bit too much.
After breakfast, Yang Wendong played with his son for a while. Little Zhiwen soon brought out a pile of LEGO blocks and began building. Yang Wendong sat nearby, watching quietly.
Su Yiyi came over and asked, "What are you looking at?"
Yang Wendong smiled. "These blocks. The person who invented them was a genius."
Su Yiyi tilted her head. "But your Rubik's Cube isn't bad either."
"It's great, yes. But that's more of an adult toy," Yang Wendong said. "Compared to building blocks, it has a much smaller market."
Su Yiyi laughed. "One step at a time. I think that new Calabash Brothers animation is doing pretty well lately."
"Yeah, it's performing decently," Yang Wendong nodded. "Hopefully, our upcoming projects will do just as well."
Su Yiyi asked, "Are you preparing to release a new product?"
"Yes," Yang Wendong replied. "But first, we need to release a new comic."
Around 10 a.m., after arriving at Changxing Tower, Yang Wendong immediately summoned the heads of the comic division.
"Old Wu, how's the Black Cat Detective comic coming along?" Yang Wendong asked directly.
Wu Hailin replied, "Mr. Yang, we've already finalized all the character model designs, and the storylines for the first 10 episodes are complete. We're planning to run it in the next issue of the Comic Weekly, about a week from now. Here's the first issue. Please take a look."
"Alright." Yang Wendong took the draft and began reading.
Back when he first transmigrated, Black Cat Detective—and even Calabash Brothers—felt pretty mediocre to someone who had experienced the explosion of information and culture in his previous life. They didn't exactly grab his attention.
But after a few years, time had dulled his entertainment threshold, and now he found it quite enjoyable.
Within a few minutes, he finished the first issue. After closing the paper, he commented, "The story is pretty good. But the dialogue still needs to be simplified. Our primary readers are children and students—the simpler the language, the easier it is for more of them to understand."
If they could make an animated version, even three-year-olds who hadn't started school would be able to watch and comprehend the story.
But without the means for animation yet, they had to stick with comics for now—a huge limitation, but one they had no choice but to accept.
Wu Hailin nodded. "Got it. I'll simplify the dialogue further—keep the wording as basic as possible."
Yang Wendong nodded. "Alright, proceed with publishing as planned."
"Understood," Wu Hailin replied.
Yang Wendong then asked, "How are the cartoon sticker sales going?"
Stickers were difficult to patent, especially since similar products already existed overseas. But cartoon character stickers were protected by copyright, not patents.
And in most countries, copyright law was actually stronger than patent law. Patent systems were designed to encourage innovation and discourage monopolies, so overly broad or outdated patents were discouraged. But copyrights came with fewer such limitations.
Wu Hailin reported, "The Calabash Brothers sticker series launched in October last year. As of today—roughly 80 days—we've sold about 10.5 million individual stickers across Taiwan and Hong Kong. Each sticker sells to distributors at 5 cents apiece, so total revenue has reached around HK$500,000."
"Ten million stickers?" Xiao En asked in shock. "That's almost equal to the population of both places combined!"
Unless the numbers were huge, sub-division sales data was only reported quarterly—so he hadn't realized the sticker business had grown this much.
Wu Hailin explained, "Mr. Yang, stickers are different from comic books or magazines. A lot of people buy many different designs at once, and others buy them repeatedly. So even if only a few hundred thousand kids like Calabash Brothers, each buyer might purchase dozens of stickers. And the price is so low—just a few cents each."
Yang Wendong asked, "What's the profit margin on these?"
For smaller products, he usually didn't pay too much attention. If it weren't for the fact that this was their first cultural product line, he wouldn't even be asking about amounts in the hundreds of thousands.
Wu Hailin replied, "We source them from Changxing Industries at 3 cents per sticker. Their side earns about 30% profit. We make 2 cents gross margin per sticker. The end retailers usually sell them for 8 to 10 cents."
Yang Wendong nodded with a smile. "That's pretty high-margin."
The cultural industry was under Changxing Culture Company. For this sector, Changxing Industries acted as a manufacturer. The same model would apply to future products involving character-licensed toys.
"Yes," Wu Hailin added. "Our profit on newspapers is actually very low—we barely break even. Some people even share a single paper.
But when it comes to stickers, kids have to buy them individually. That gives us a much better margin."
"Our comic work has to rely on products like these to turn a profit," Yang Wendong said with a laugh. "Later on, we don't need to focus on earning money directly from the weekly comic magazine. As long as it breaks even, that's good enough.
And if merchandise sales grow, we won't even need the single-volume comics to make money either. The main goal is to let more people get to know our cartoon characters."
Whether it's books, magazines, or other forms of media, it's always hard to convince a new customer to pay for something they've never heard of. Consumers are price-sensitive to unfamiliar cultural products. If the cost seems high, they hesitate to buy—and that's perfectly normal.
But once they're familiar with the characters, it's a whole different story. People become willing to spend—and that's where the real profit lies: derivative products.
In the previous world, many animations didn't make much money on the content itself. But once an IP became famous, it could generate revenue across countless sectors.
"Understood," Wu Hailin said.
Yang Wendong then asked, "How's your Japanese coming along?"
Wu Hailin laughed. "I can hold basic conversations and read some simple children's comics. When I don't recognize a word, I check the dictionary or ask my tutor."
Yang Wendong said, "That's good. Learning a new language takes time, but Japanese comics are far ahead of ours. If we want to understand the essence of their work, we must learn the language and understand their culture.
Since you can now read some basic manga, start studying their storytelling techniques."
"Understood," Wu Hailin replied. "Japanese comics really are better than what we had in Hong Kong—or even the mainland."
"That's to be expected. Culture is tied to economic strength. Without a strong economy, it's hard to develop your own cultural ecosystem." Yang Wendong then added, "Also, you should study Western technological trends. In the future, we might incorporate those elements into our comics. You'll need to understand them in order to develop relevant stories."
Many Japanese and American comics included sci-fi and tech elements. Think Transformers, Doraemon, even Dragon Ball—they all involved futuristic tech in some way.
If a writer didn't understand how the public perceived technology, they couldn't create believable tech-based storylines.
Even science fiction needed a foundation in modern science—otherwise, it turned into fantasy.
"I've already started studying that," Wu Hailin nodded.
"Good. Let's keep going. Changxing Culture plans to launch several new comic series this year. You'll need to prioritize recruitment—especially artists and story writers."
As a time traveler, Yang Wendong could only recall rough outlines of some classic plots from past animations, films, or TV shows. He had forgotten most of the details—even some key parts.
So after he provided the basic concepts and structure, he relied on industry professionals to flesh out the stories and build the characters.
Wu Hailin hesitated and said, "Mr. Yang, that's actually where we're facing some issues right now."
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