Chapter 414: The Arrival of Spring for Hong Kong's Film Industry
In the following days, Yang Wendong gradually learned more about the detailed arrangements behind Hang Seng Bank's recent equity offering.
Apart from Yang Wendong, a number of other prominent Chinese families had participated—especially several of the more established clans, like the Ho family.
Interestingly, the one thing these families had in common was that none of them were involved in banking or finance. It was clear that Ho Sin Hang was building a coalition of allies.
This was a common tactic among Hong Kong tycoons. If you were planning to take your business public and had to relinquish some shares anyway, it was better to allocate them to strong, non-competing families. That way, mutual interests could bind them together, paving the way for future cooperation.
Had it not been for Yang Wendong's greatest wealth—the knowledge in his head from another life—he, too, might have brought in other investors while building his empire. After all, diversification of ownership was normal business practice.
—
By the end of October, Changxing Financial Investment Company and Hang Seng Bank officially finalized their agreement. For HK$9.8969 million, Changxing Financial acquired 3% of Hang Seng Bank's shares. The funds would be transferred into the bank's account accordingly.
In reality, Changxing only paid HK$2 million in cash. The remainder was financed through a loan from Hang Seng itself—a deal so favorable even Yang Wendong felt it was a bit too good to be true. Sure, there was interest and principal to repay, but the amount was minimal in comparison to the strategic value.
Most importantly, this made Yang Wendong an official shareholder of Hang Seng Bank. When the inevitable bank run came, he would now have a legitimate reason to intervene.
—
October 29 — another, even larger transaction was approaching completion.
That day, Shen Yufan, head of Changxing Financial, and Zou Wenhuai came to Yang Wendong's office in Changxing Tower.
"Mr. Yang," the two greeted him respectfully.
Yang Wendong waved them to their seats. After the assistant brought tea and left, Zou Wenhuai began, "Mr. Yang, regarding the Southeast Asia theater acquisition, Mr. Shen and I have been working closely together. We've just finalized a tentative price."
"How much?" Yang Wendong asked, setting down his pen.
Investing in theaters across Southeast Asia wasn't just a strategic move to support Hong Kong's film industry—it was also Yang Wendong's first major venture into the region. If things went well, the theater chain would become a base from which to expand into other industries, and the relationships he built would open doors throughout Southeast Asia.
"US$13.1 million," Shen Yufan replied. "That seems to be the Lu family's bottom line."
"You negotiated them down US$1.5 million? Not bad," Yang Wendong smiled. The original quote from Lu Yunsheng had been US$14.6 million, and it had sounded like a classic case of starting high to leave room for negotiation.
"Yes," Shen explained, "Though there were other interested buyers, all of them only wanted part of the portfolio. That made things much more complicated for the Lu family.
We were the only ones willing to purchase everything, and that gave us strong leverage to negotiate the price down."
"Alright, sounds good," Yang Wendong nodded. "What about the financing? Which bank is offering the best terms?"
Even for him, US$13 million was no small sum. Since these theaters were assets with strong collateral value, it made sense to finance as much of the deal as possible.
"I've already spoken with several banks in Singapore," said Shen. "OCBC and Standard Chartered's Singapore branches offered the lowest interest rates and most favorable terms.
My suggestion is that we let them form a lending consortium to fund the deal. That way, we avoid overexposing ourselves to a single bank, which reduces financial risk.
Also, since we're planning to invest heavily in Singapore moving forward, building relationships with multiple banks now is strategically wise."
"Sounds good. Draft a full report and send it to me," Yang Wendong said. "Once headquarters has completed their review, I'll sign off."
Whether the deal was in Hong Kong or overseas, if Yang Wendong hadn't negotiated the price himself—like he had with Walmart—then standard protocol applied. That meant preliminary due diligence by internal staff, post-deal audits, and sometimes even third-party review for more complex transactions.
This structure helped mitigate internal risk. As the group grew larger, it was no longer sustainable for Yang Wendong to make every decision himself. Delegation was necessary, but so was a strong system of supervision, compliance, audit, and even legal follow-up where needed.
A sound system was key to a business's long-term health.
"Understood," both Shen Yufan and Zou Wenhuai replied.
—
By early November, multiple reports reached Changxing headquarters and were approved. Thus, the largest overseas real estate acquisition in Changxing Group's history officially began.
Since the properties in question were mainly for film-related operations, ownership would fall under Changxing Film Company. But the company clearly couldn't afford such a large purchase. So Yang Wendong arranged to transfer US$3 million from Changxing Industrial to the film division.
With help from Changxing Financial and a Hong Kong-based international law firm, Changxing Film Company successfully signed a loan agreement with OCBC and Standard Chartered, securing US$10 million to acquire all 82 theaters from the Lu family.
With this, Changxing Group officially established a foothold in Southeast Asia.
—
November 10, after the deal closed, Yang Wendong returned to Singapore and visited the head office of Capitol Theatre once more. Watching the bustling crowds outside lining up to see movies, he smiled and said, "With this acquisition, our number of theaters has just tripled overnight."
"That's right. We only had a little over 40 theaters in Hong Kong before," said Zou Wenhuai. "This deal guarantees that every movie we produce going forward will see at least double the profits.
Owning the theaters directly gives us far more profit than selling distribution rights abroad. And with higher returns, we'll have enough capital to make more films."
"So tell me, compared to Shaw Brothers, how do we stack up now?" Yang Wendong asked with a grin.
Zou paused. "If we don't factor in your personal support, I'd say we're neck and neck. Shaw Brothers' theaters may not be as big or well-located, but they have more of them, and they've had a longer head start in promotion. Their ticket prices are also lower.
We may operate better, but with price differences and location limitations, it's hard to take market share from them directly."
"Exactly. Lu Yuntao and I shared the same business philosophy. Our theaters don't directly compete with Shaw Brothers—neither in Hong Kong, nor in Southeast Asia," Yang Wendong said. "But that's a good thing. Competition drives innovation. Monopolies stifle creativity."
This principle applied not just to cinema, but to industry, services, and art. Without rivals, there was no incentive to improve. This truth appeared throughout economic history—and even at the national level.
If Yang's goal were simply to monopolize Hong Kong cinema and maximize profit, then eliminating competitors like Shaw Brothers might make sense. But his ambition was to create great movies. In that case, having competition was a boon, not a burden.
"Understood. Shaw Brothers is definitely strong," said Zou. "They've released some pretty good films these past few years."
"That's exactly how it should be," Yang Wendong said with a smile. "Also, once we return to Hong Kong, make the acquisition public and notify all Hong Kong film companies that the Changxing Theater Chain in Southeast Asia will prioritize screening Hong Kong-produced films. As long as their films can bring in profits for our theaters, they'll earn significantly more than before."
Selling films to overseas markets—especially to what the industry called "wai fu" (foreign territories)—had always been difficult. The core of the wai fu market was Chinese-language theaters abroad, particularly in Southeast Asia. But this market had long been controlled by Shaw Brothers and previously Lu Yuntao's chain, and they primarily screened their own productions. As a result, unless a film was a breakout hit—or came from Taiwan—most Hong Kong studios couldn't even get into the market, or would be price-suppressed by the duopoly.
Now that Yang Wendong had taken control of Lu Yuntao's former cinema empire, of course it was natural to prioritize his own movies, but that didn't mean excluding others. Doing so would stifle innovation.
"That's great news for Hong Kong's other film companies," Zou Wenhuai nodded after a pause. "But… won't that hurt our own studio's profits?"
Yang Wendong shook his head. "A hundred flowers must bloom. If we want Hong Kong cinema to thrive, it can't just be us and Shaw Brothers competing alone.
As for hurting ourselves, don't worry. We don't produce enough films yet to fill that many screens. Unlike Shaw and Lu in their heyday, we actually need more titles to fill slots.
And in the future, as we produce more, I'll continue expanding our cinema network in Southeast Asia. When that happens, we'll have more than enough screens to prioritize our own films."
This acquisition was only step one. His plan was to expand deeper into Southeast Asia—both to support Hong Kong cinema and to take a slice of the region's economic growth.
"Understood. We don't have enough productions to fill all those screens yet anyway," Zou Wenhuai nodded. "What about Shaw Brothers' films?"
Yang Wendong grinned. "Definitely not—unless they allow our movies into their theaters. Then we can talk about fair competition."
In most modern developed nations, it's forbidden for a movie studio to own a cinema chain outright. For example, in the United States, Hollywood studios aren't allowed to control theaters or even distribution arms directly—though this was relaxed in the 1980s for economic reasons.
But in a small place like Hong Kong, monopolies were rampant. Big studios like Shaw owned their own theaters and only screened their own films, fully dominating both upstream and downstream.
For short-term profits, this made sense. But it stifled innovation. That's why Shaw Brothers eventually lost to Golden Harvest—because their model had stagnated.
"Then I guess there's no chance," Zou Wenhuai said with a laugh.
Yang Wendong nodded. "As for managing the theaters over there, keep the original staff. Just have a few of our people stationed there to coordinate."
"Got it," Zou Wenhuai replied.
—
Two days later, Yang Wendong and his entourage returned to Hong Kong. Rumors about the massive HK$60 million acquisition had already begun to circulate.
Kong Wah Daily was the first to break the story. On its front page, the number "60,000,000" was printed in bold, eye-catching text. It was impossible to ignore.
"HK$60 million!?"
Several young men holding the paper stared at the number and sighed.
"I don't even have HK$600 to my name," one of them moaned. "Reading this stuff is depressing."
"Haha, A-Long, the Post-it Note King used to live in squatter huts. He had it way worse than you," another joked.
"Forget it, we can't compare," the youth muttered with a heavy sigh.
All over the city, newspaper readers were reacting the same way. HK$60 million might not have been the biggest deal in Hong Kong's history, but it marked the first time a Chinese business had made such a massive investment in Southeast Asia.
—
At Shaw Brothers' headquarters, Run Run Shaw stared darkly at the paper. After a long silence, he exhaled heavily.
"I thought Lu Yuntao's death meant one less competitor," he muttered. "But I never imagined that Yang Wendong would swoop in and buy his entire theater chain in Southeast Asia."
"We can't compete with his capital," someone nearby said quietly.
"But why?" Run Run Shaw continued. "He owns so many industries—each one more profitable than film. Why would he invest so heavily in Southeast Asian cinemas?"
The current box office ceiling in Hong Kong was around HK$1 million per hit film. Even with overseas distribution, a best-case scenario would bring in about another HK$1 million. Most films made only a few tens of thousands.
Even a heavyweight like Shaw Brothers would be lucky to make a few million in profit annually.
By contrast, a single real estate development project could net a few million in profit. Why would a titan like Changxing Group bother with such a small-margin industry?
"Maybe it's just a personal interest?" someone guessed. "Lu Yuntao came from a Malaysian mining dynasty, yet chose to make movies simply because he loved it."
"If that's true, then we're in trouble," Run Run Shaw sighed.
When major capital enters a small market, it often destroys the existing players.
"That's what I'm worried about too," another person said. "The paper said Changxing Film will promote more independent Hong Kong films in Southeast Asia, as long as they're good quality. That'll give those studios access to much higher overseas profits.
Clearly, Changxing is using this chance to advertise themselves—to show other studios they have better distribution channels."
"He's accepting other studios' films?" Run Run Shaw pondered, then nodded. "Not surprising. Their theaters in Hong Kong also screen outside productions. They even let other studios compete with their own films. That's probably Yang Wendong's idea, not Zou Wenhuai's."
"Most likely," someone agreed.
Run Run Shaw frowned. "If he's serious about building a real theater empire, then this move will benefit all the smaller studios. It'll make competition in the film sector much tougher."
"Maybe we could screen our films in his theaters too?" someone suggested. "It'd give us another revenue stream."
Whether in Hong Kong or Southeast Asia, each theater had limited geographic reach. Having an extra outlet always meant more box office.
"Probably not," Run Run Shaw replied. "But you should ask anyway—can't hurt."
"Will do."
—
Meanwhile, small and mid-sized Hong Kong film companies were buzzing with excitement.
"Wait, does this mean our films can be shown in Southeast Asia now? We're going to make a killing!"
"I don't know… Would he really spend HK$60 million just to help us?"
"Why not? Changxing already built theaters in Hong Kong that screen all kinds of films—even after they started making their own movies. Nothing changed for us."
"True. Mr. Yang really is different from those other theater bosses."
"Then we'd better get to work and produce some good films. If this keeps up, everyone gets a piece of the Southeast Asian market!"
"Haha, finally—a real springtime for Hong Kong cinema!"
A group of film company owners grinned and clapped each other on the back. With a real market and new distribution channels, Hong Kong's film industry was on the verge of a golden age.
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