Chapter 183: The Taiwan Visit and a Successful Investment
"Alright," Zheng Zhijie replied. "Mr. Yang, at the end of the month, the Hong Kong government will hold another auction. Several large residential properties will be included. I plan to attend and bid."
"Residential?" Yang Wendong paused, then asked, "Have we secured qualification to participate?"
"Yes," Zheng said with a smile. "We'll be eligible for the next auction."
"Good. Then that will be Changxing Real Estate's first official battle." Yang nodded.
In Hong Kong, there were far too many real estate companies for every one of them to qualify for government land auctions.
At the very least, they were required to have registered capital exceeding 1 million HKD, a proper company headquarters, and proof of previous development experience.
Money and headquarters could be arranged, but experience was harder to fabricate.
To get around that, Zheng had leveraged connections and set up a small group of tenement buildings in Tsim Sha Tsui, which—just barely—counted as experience.
Even so, the auction committee still needed some "additional persuasion" before granting Changxing the green light.
In the past few auctions, Yang had spotted quite a few promising land parcels, but without qualification, he had to sit on the sidelines.
Zheng handed over another file with a grin. "Here's the info on this month's government land auction. Among the lots is a plot in Admiralty—about 60,000 square feet. It's the best residential location in this auction."
"Hmm, nice location." Yang flipped through the file.
Admiralty was close to Central and often considered the second tier of premium locations in Hong Kong.
In his past life, many wealthy Hongkongers worked in Central and lived in Admiralty.
In a few more years, Admiralty itself would become one of the city's most prosperous commercial hubs.
Zheng continued, "The starting price is 1.5 million HKD. With a plot ratio of 5.5, we can build up to 330,000 square feet of residential space."
Yang quickly did the math. "Apartments in Admiralty are going for, what, mid-20s per square foot? That puts gross sales around 7 to 8 million?"
"Roughly," Zheng nodded. "Construction cost for 330,000 square feet will be around 2 million HKD.
The critical variable will be the final land price. I expect it'll be bid up to around 2.5 million. Any higher, and we risk a loss.
Interest expense will also be a factor. Most developers only put up a few hundred thousand in cash and borrow the rest. Interest can be crippling."
"At standard industry interest rates, it's still profitable—just not massively," Yang noted.
Zheng agreed. "Right. But if you're risking a few hundred thousand of your own money, and only earning a few hundred thousand in return, that's considered a failure."
"Alright. We'll treat this as a trial run." Yang paused and added, "Let's operate like any other developer—leverage as much bank financing as we can. Stick to standard real estate practices."
If he were acquiring a prime Central property or something like a cinema, he'd pull out all the stops.
But now that they were formally entering the market, the goal was to train the team.
When the property crisis of '66 arrived, Yang wanted an experienced real estate company ready to pounce. He couldn't personally handle every deal.
If they waited until then to build a team, it would be too late. And the downturn would only last two years—by '68, they'd need to begin developing the land they'd scooped up during the crisis.
Now was the time for the team to grow and gain experience with market-driven expansion.
"Understood. I'll reach out to Liu Chong Hing Bank. They've already promised to fully support us," Zheng said.
Yang asked, "Isn't Liu Chong Hing tied to its own real estate arm? Doesn't that make us competitors?"
Zheng shook his head. "Not really. Liu Baoshan's real estate company already uses their own bank's capital.
He wouldn't make life difficult for us—his banking business depends on serving all clients."
"True," Yang nodded. "He may be arrogant, but he's not stupid. He knows there's risk. He's just blinded by profit, convinced that his investments won't go south."
"I'll get everything ready," Zheng said.
"Keep me updated on any changes," Yang instructed.
He placed great importance on Changxing Real Estate's first big move.
...
August 12 – peak of summer.
Wei Zetao arrived at the Hong Wah Tower in Central.
"Come on in, Old Wei. It's scorching out there—have a cold Coke," Yang said with a smile.
His favorite summer drink was Sprite, but it hadn't been introduced yet.
Hong Kong had some local sodas, but he wasn't a fan. Coke was the most satisfying.
However, this era's Coke was far sweeter than what he remembered. Even Yang found it hard to drink too much.
"Thanks," Wei said, taking the bottle. "It took almost an hour to cross the harbor. The car had AC, but the sun was brutal."
"Yeah, and it's a waste of time too," Yang agreed. He wasn't fond of running between the Island and Kowloon during the hottest months.
Wei added, "I heard a government official proposed building a bridge over Victoria Harbour. I hope it happens soon.
We have cars—it's inconvenient, but tolerable. For regular folks, it's unbearable."
"Let's hope," Yang nodded.
He knew from history that the project would drag on for a decade.
Maybe he could intervene and accelerate the construction of the Cross-Harbour Tunnel.
That tunnel had been an extremely lucrative investment.
If he could buy up land on both sides ahead of time, the profits would be astronomical.
In fact, compared to the increase in land values brought by such infrastructure, the tunnel's direct income was relatively minor.
This was also the logic behind building subways in many large cities in his past life.
The subway lines themselves weren't profitable—but the real estate value near stations more than compensated.
Still, it was too early now. The timing wasn't right.
Even within the government, debates over whether to build a bridge or a tunnel would drag on for years.
During a real estate boom, such obvious profit-generating projects were out of reach for private players.
And the investment required was huge. In the original timeline, the tunnel cost 320 million HKD. Even adjusted for inflation, that was way more than Yang could afford today.
After two sips of Coke, Wei said, "Mr. Yang, we've made progress with Formosa Plastics. Wang Yung-ching is open to investment—but he'd like you to visit Taiwan personally."
"You want me to go to Taiwan?" Yang thought for a moment and agreed. "Alright. I should see Formosa's operations for myself."
Wei added, "They plan to buy land near their current factory to build a new one—assuming the investment goes through."
"This factory's future production target is 2,000 tons of plastic pellets per month. At first, it'll supply us, and later, they'll try to supply other plastic manufacturers in Hong Kong. Mr. Wang even hopes to eventually export to Japan," Wei Zetao explained.
"Haha, quite ambitious," Yang Wendong nodded. "Alright, let's take a trip to Taiwan. I've never been there."
Although he wasn't too clear on Wang Yung-ching's business history, Yang did remember that by the late 1970s, Wang had become one of Taiwan's top tycoons, and Formosa Plastics had grown into one of Asia's largest plastic manufacturers.
Industries like this couldn't grow as fast as the internet or finance sectors, which meant that for such heavy industry to rise so quickly over just two decades was already a remarkable feat.
If that was true, then this might be the last chance to invest in Formosa Plastics before it really took off. Once their products started selling globally, it would be almost impossible to buy in. At best, he'd have to wait until the company went public to buy some shares like any retail investor.
Three days later, Yang Wendong brought Su Yiyi, Auntie Guo, Zhao Liming's family, and Lin Haoyu's family with him to Taiwan. They were all going for leisure.
Wei Zetao and Hong Xuefei went too—strictly for business.
The group chartered a small vessel from Hong Kong and set sail directly for Taiwan.
Out on the sea, the ocean breeze was strong. Even during the sweltering summer, the open water was cooler. As long as one stayed out of direct sunlight, the air felt refreshing.
"This is great," Yang Wendong stretched and said. "Yiyi, one day when we have more free time, we'll go to Europe and buy our own private yacht. Then we can take trips like this whenever we want."
"A yacht? You mean an oil tanker?" Su Yiyi blinked, not quite following.
"No, no," Yang laughed. "A pleasure boat. Rich people buy them to sail in rivers or along the coast just for fun."
"Oh…" Su Yiyi started to understand. "That's a bit too luxurious, isn't it? A whole boat just for fun?"
Yang shrugged. "It's the same as buying a house. We're making more money than we can spend. So why not?
As long as it's not reckless waste, it's meaningful spending. If wealthy people didn't spend, the economy wouldn't move."
Spending and wasting were not the same. In the future, if he was rich enough, buying a private jet or yacht would be normal.
The next morning, the yacht arrived at the port of Taipei. This was Yang Wendong's first time setting foot on Taiwanese soil.
Wang Yung-ching came in person to greet them. "Mr. Yang, Madam Yang, Mr. Wei, Mr. Hong—welcome to Taiwan."
"Mr. Wang, hello," Yang smiled and shook his hand politely.
After some formal greetings, Wang brought everyone onto a mid-sized bus and headed toward the Formosa Plastics factory.
"Quite the scenery," Yang remarked as they passed through rural towns and farmland.
Su Yiyi asked curiously, "What's wrong?"
"Nothing," Yang smiled. "It just reminds me a bit of how China looked in the '80s."
After an hour's drive, they arrived. Under Wang's guidance, Yang and the others got a good look at the factory and its operations.
Yang wasn't there to study the production of plastic pellets in detail—he cared more about the numbers.
After touring the current plant, they moved to an adjacent plot of land. Wang explained, "Mr. Yang, this is where I plan to build the new factory. It's 15,000 square meters, and the goal is 2,000 tons of monthly capacity."
"How much will it cost to build?" Yang asked.
Wang replied, "The buildings aren't expensive. It's the equipment that's costly. It all needs to be imported from Japan—about $600,000 USD."
"That's a lot," Yang admitted. Even he felt the number was daunting.
If he weren't a time traveler, he might have hesitated to invest this much in heavy industry.
Wei asked, "Mr. Wang, how much does the land cost?"
Wang laughed. "Land is cheap. Basically free. The government encourages industrial development. As long as it's not a prime location, they're practically giving it away."
"That's great," Yang smiled. He knew that in the future, one of the main reasons Hong Kong's industry would decline was because of sky-high land prices.
After that, Wang walked them through the full plan for the new facility.
That evening, they returned to their hotel. Su Yiyi joked, "Dong-ge, it looks like Mr. Wang really wants to lock in our orders."
"Of course," Yang replied with a grin. "Our rolling suitcase is going to be a global hit.
In the first year alone, our demand for plastic pellets could surpass his entire current capacity. Any rational businessman would want a deal."
Even though PVC pipes had broader use cases, Wang was still limited to the local Taiwanese market.
Compared to a product with global sales potential, he was still thinking small.
The next day, Yang met Wang in his office. They sat over tea and got down to business.
Yang said bluntly, "Mr. Wang, you're short on funds and need stable orders. I want to invest in my key suppliers.
So this partnership is a win-win. Let's move fast—get the factory built and start supplying us."
"Absolutely," Wang agreed readily. "Mr. Yang, here's Formosa's financial data from last year. Based on typical public company valuations, we're worth around $2 million USD.
You can confirm this with any Hong Kong financial institution."
"Alright," Yang replied, glancing at the data without studying it too closely. That was something professionals would verify. "How much equity are you offering?"
"Twenty percent," Wang said. "But I need two things:
First, you help me get a bank guarantee so I can secure a $500,000 loan.
Second, as long as I meet your quality standards, I get priority as a supplier to Changxing Industrial."
Yang replied, "The first is doable. But you'll need to negotiate loan terms with the bank yourself. Commercial loans don't come cheap.
As for the second, partial priority is fine—but I can't promise you all of it.
What I can promise is: as long as the quality is good and your price is the lowest, I'll buy everything your new factory can produce.
If you build more factories in the future, we'll have to renegotiate."
"Fair enough," Wang nodded.
"Alright then," Yang said. "If your data checks out, I'll go ahead with the investment."
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