Chapter 383: Wealth Summary of 1963 (Part 1)
February 7, 1964 — Friday
This was the final working day of the year for Changxing Group before the Lunar New Year. Yang Wendong gathered all key personnel from the group's subsidiaries for an annual review.
As Yang Wendong entered the meeting room, all attendees stood up and greeted him in unison, "Good morning, Mr. Yang."
Yang Wendong smiled and waved. "Sit, sit. It's the last workday before the New Year—let's keep things relaxed today."
"Got it~" Several people smiled as they sat.
The corporate culture at Changxing Group was known to be easygoing. Though the work could be demanding, interpersonal relations were always healthy. Even Yang Wendong himself greeted janitors without putting on airs, which naturally set a tone that everyone else followed—whether willingly or not.
Yang Wendong continued, "The reason I've called everyone together today is to go over each company's progress from the past year, and to outline our plans for the year ahead.
Given the close collaboration between many of our subsidiaries, I think it's important that everyone is aware of the broader picture. That way, future cooperation will be more effective."
It had become tradition for the core leadership of Changxing Group to hold a comprehensive internal review meeting right before or after Lunar New Year. Only high-level executives and first-tier subsidiary leaders attended. The meeting would summarize key financial data and strategic developments.
That said, the figures discussed were always macro-level. Even a moderately skilled journalist could piece together similar estimates. For example, Changxing Industries' exports were clearly recorded in customs databases, while Changxing Real Estate's housing developments were filed with the property registry. Although these numbers were technically confidential, approximate estimates—within 20% accuracy—were easy to derive.
As such, there was no need for secrecy among internal executives—at least not with non-critical data. Of course, the Group's headquarters knew every detail down to the decimal.
At this point, Wang Fengzhi, the head of Group Finance, reminded everyone, "Please keep in mind, no discussion of net profit or profit margin figures. Stick to revenue, growth rates, and forward-looking plans."
"Sister Wang, this isn't our first year-end meeting. No worries," Yang Wendong said with a light laugh.
"We all understand, Sister Wang," added Wei Zetao with a smile. "Why don't I start the reports?"
Changxing Industries was the oldest subsidiary within Changxing Group, and still its largest in terms of both revenue and profit. Many other businesses had only taken off because they were able to rely on Changxing Industries in their early days.
You could say it was the group's "firstborn."
"Go ahead," Yang Wendong nodded.
Wei Zetao opened his prepared folder and began. "Changxing Industries now produces a wide range of products. But our core offerings remain sticky notes, rolling luggage, spin mops, adhesive hooks, plastic bags, and woven sacks.
Because these segments have grown significantly, we've also expanded upstream into the supply chain. We now operate our own paper manufacturing, glue and plastic R&D centers, and we've invested in Formosa Plastics as well.
That's why I've spoken with Mr. Yang about restructuring Changxing Industries into four divisions: Paper Products, Plastic Products, Flexible Packaging, and an Internal Innovation Division."
Yang Wendong chimed in, "Right. The scope of our operations at Changxing Industries has become too wide. It's time we reorganized—just like Changxing Group itself. One team can't manage everything efficiently.
We're starting with four divisions. But if any one segment scales up significantly—like, say, glue for sticky notes—it can later be spun off into its own business unit."
Everyone nodded. It was a natural progression for growing companies.
In good times, businesses could scale rapidly. In Yang Wendong's previous life, many mainland Chinese companies went from struggling local factories to global giants in just two decades. With Yang Wendong's foresight, Changxing Group was growing even faster.
So dividing the business into specialized divisions was inevitable—just like any other large corporation.
Wei Zetao continued, "The first division's core product is sticky notes. Last year, we sold 1.65 billion units—up 17.1% year-on-year. Revenue reached HKD 156 million, an 18.9% increase.
Additionally, we sold mouse traps and fly paper worth HKD 42 million—up 31% from the previous year."
"Sales of glue traps rose that much?" Yang Wendong asked with a smile. "Looks like we really expanded our channels."
"Yes," Wei Zetao replied. "Sticky notes initially relied on 3M's distribution. While we're now in other markets, our early partnership with 3M made it easier to find reliable distributors.
In contrast, glue traps had to be built up from scratch. Growth was slower at first, but as our brand gained recognition, distribution became easier. Now glue trap sales are skyrocketing."
"Very good." Yang Wendong nodded. "So how many workers are currently dedicated to glue trap production?"
Different industries had different labor needs. Some processes were automated; others relied heavily on manual work. Glue traps were the latter.
By the time sticky notes became a major revenue stream, Yang Wendong no longer cared much about glue trap profits. But he insisted on maintaining the product line because it created jobs—particularly for women, vulnerable groups, and even the disabled. Once he expanded to the mainland, this segment would be ideal for setting up the first batch of factories.
"Roughly 3,500 workers," Wei Zetao replied.
"Good. Keep supporting that line. The market is still huge," Yang Wendong said. "No country on Earth is free of rats."
Where infrastructure was weak, rats thrived. There was even a saying: for every person in a city, there were ten rats living underground.
Asia's rapid economic growth meant more food, more waste—and more rats.
So a highly effective rodent-control product would always have strong demand.
"Understood, Mr. Yang," Wei Zetao said. "The only issue is piracy. Glue traps are easy to copy. In Southeast Asia, where labor is cheaper, many small shops can make them at home with lower costs. The competition is fierce.
Our edge comes from investing in R&D. Our glue has better performance, and we focus on big-city retail channels."
Yang Wendong nodded again. "Makes sense. Keep going."
"Mhm, trying to compete with small workshops on cost is never easy," Yang Wendong said after a moment of thought. "We're already producing our own glue in-house. So the biggest external cost is probably the paperboard, right?"
Wei Zetao nodded. "Yes. We use a special waterproof paperboard that we currently import from Japan. It's expensive and makes up more than half of the cost. Unless we switch to plastic, which would make it too heavy, hard to transport, and difficult for clients to sell."
"Can we produce it ourselves in Taiwan?" Yang Wendong asked. "Think about finding a solution."
"I spoke with Ma Jiayou about this," Wei Zetao said. "He believes we'd need to purchase a patent from Europe or the U.S. Taiwan currently doesn't have the R&D capability for this, and the relevant equipment would also need to be imported."
"Tell Mr. Ma to look into full-system equipment quotes from overseas," Yang Wendong said after pausing. "Mouse traps were my first business. They create a lot of jobs and serve a real purpose. This industry needs to be done right—ideally to become number one in the world."
Although they held patents, products as small and simple as glue traps were easy to imitate. Enforcement could only be maintained in some Western countries, where they could limit distributors. But elsewhere, it was nearly impossible.
Still, a better weapon than patents was scale and full control over the production chain. Once costs were lowered to the absolute minimum, no competitor could survive.
And while foreign markets might involve tariffs or other political challenges, something like a glue trap wouldn't draw attention. That was the benefit of working in niche industries.
If one day Hong Kong's labor costs became too high, China would already be opening up. A labor-intensive, export-friendly factory like this would be very welcome on the mainland. It could easily be relocated to Shenzhen or another nearby city.
And since he'd already be buying land for the glue trap business, he could specifically choose what would become Shenzhen's future city center. The real estate appreciation alone would make it worth it, even if the business only broke even.
"Understood, I'll relay the message to Mr. Ma," Wei Zetao said.
"Mhm. Any other products under the first division?" Yang Wendong asked.
"Yes," Wei Zetao replied. "Office paper, toilet paper, and small-pack facial tissues—all produced by our paper plant in Taiwan. The overall scale is still small, though, with a total revenue of just HKD 1.65 million.
However, sales of facial tissues have grown rapidly. Besides sales in Taiwan and Hong Kong, we've recently started exporting to Japan, where they've been incredibly popular. Japanese buyers are placing orders like crazy—even prepaying—and a few companies are asking to license the patents."
"Don't license the patents just yet. We'll produce it ourselves," Yang Wendong shook his head. "Tell Mr. Ma to scale up production according to demand. Don't be afraid to invest—we've got the funding."
As a time traveler, Yang Wendong knew just how big the market for small-pack facial tissues would become. Everyone needed them, and they weren't expensive.
Unlike sticky notes, which had limited market size, hygiene paper products had massive demand—potentially 100 times greater.
When demand was high, you could scale up production, reduce unit costs, and gradually move upstream in the supply chain, eventually expanding to other paper products. That was the roadmap for building a giant paper company.
"Understood." Wei Zetao nodded. "Moving on to the second division: its core products are rolling suitcases, adhesive hooks, and spin mops. The suitcase is still our top product. We sold 10.35 million units last year—large and small combined—for a total revenue of HKD 211 million. That's about 15% year-on-year growth."
"15%? That's not a lot," Yang Wendong said. "Seems like competition is getting fierce?"
"Yes," Wei Zetao admitted. "There are already established brands in the U.S., Europe, and Japan. Our growth is mainly because we were first to market in some regions. Plus, we invested heavily in advertising last year—especially in Western markets—and even hired trending Western celebrities as spokespeople."
"Advertising is necessary," Yang Wendong nodded. "It may seem costly now, but once a brand is established, long-term returns will be huge."
Marketing was the heart of any business. In many industries, it was even more important than product development.
"Understood. We'll continue advertising," Wei Zetao said. "The second most important product in the division is adhesive hooks. Last year, we sold 760 million units and earned HKD 36 million in revenue. We estimate that accounts for about 15% of the global market."
"Very nice," Yang Wendong said with a smile. "Hooks will become increasingly important as economies develop."
It was simple logic: only concrete walls needed adhesive hooks. Wooden houses in rural areas could just use nails. But with global urbanization, demand for hooks would expand tenfold, even a hundredfold.
"That's how we see it internally as well," Wei Zetao said, smiling. "The third main product is the spin mop. For now, it operates under a licensing model because the shape is irregular and the components are divided into multiple parts, making shipping too expensive.
We only produce for Taiwan, Japan, and parts of Southeast Asia. Sales volume is low—just over one million units last year, with under HKD 10 million in revenue. But the patent licensing revenue from various global partners has been solid."
"Licensing is easy money," Yang Wendong said. "But we should still aim to manufacture ourselves. Only skip production if the market absolutely doesn't support it."
Before containerization took over, shipping costs for large or awkwardly shaped items were absurd. Even in the West, many low-end manufacturing sectors still existed—like Berkshire Hathaway, which still had thousands of textile workers in the '60s. When containerization disrupted the industry, the company collapsed and was later bought by Warren Buffett.
"Got it. The spin mop is the only product using this model," Wei Zetao confirmed. "The third division covers plastic bags, woven bags, and packaging for our sister companies—like instant noodles and facial tissue wrapping.
Our plastic bag production now exceeds 100 million per month, and we produce over 300,000 woven bags monthly. Last year, total revenue was HKD 47 million. Both are in short supply, so we'll be expanding production again this year."
Yang Wendong nodded with satisfaction.
Plastic bags and woven bags may not have seemed glamorous, but they were essential products with massive, stable demand—and the Group had the scale and internal needs to sustain them.
From internal packaging to exports, all of Changxing Group's products needed bags. As production expanded, so too would the demand for packaging. And owning the packaging supply chain meant locking in more value.
Plus, by producing in massive volumes, costs could be driven to rock-bottom levels. If they eventually dominated the Asian market in plastic and woven packaging, this segment alone could become a billion-dollar business.
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