Chapter 270: Watsons for Sale
"Alright, I'll find some time to arrange a meeting with him," Yang Wendong nodded.
Doing business in Hong Kong was still inseparable from HSBC. Even though Changxing Industrial now made tens of millions in annual profit, when it came to investing in real estate and shipping, that kind of capital was still far from sufficient.
Only by leveraging the banks could he truly expand. And the biggest bank in Hong Kong was, of course, HSBC.
Bank of East Asia and Hang Seng might be rising stars, but in terms of scale, they were still miles behind HSBC.
For a medium-sized company, it didn't matter much which bank it partnered with — you just picked the one offering the best terms. But once you were a large-scale enterprise, especially one in the shipping industry, smaller local banks couldn't even participate. Even HSBC, if it got involved, had to take on substantial risk.
The next day, inside a bridal shop in Central, Hong Kong:
Bai Yushan was trying on her wedding dress. Next to her stood someone who looked exactly the same — her twin sister, like a living mirror — helping and offering opinions.
After a long while, they finally stepped out of the fitting room. Yang Wendong glanced at the two and asked, "You two look exactly the same. Are you sure you want to be the bridesmaid?"
"Of course. My sister's getting married — obviously I should be her bridesmaid!" Bai Yujie replied as if it were the most natural thing in the world.
"Alright, suit yourself. But you'll need a different color dress, right?" Yang said, not pressing further.
Two people with the same face both wearing white — even if the designs were different — would be confusing.
Bai Yujie ignored Yang and whispered something to her sister in the wedding dress before jogging off to change.
"Here, sit. That dress looks hard to move in," Yang said, helping lift part of the dress so she could sit.
"Mm." Bai Yushan sat down and then asked, "Aren't you going to try on your suit?"
"I already did. I had mine custom-tailored long ago," Yang shrugged.
Men's clothing was so much simpler than women's — which was why, globally, the fashion industry's major segments were women's and children's wear. The men's market lagged far behind.
The upside? Simple and straightforward. The success of HLA (Heilan Home) in his previous life was built on that very principle.
"Oh," Bai Yushan responded. "Then I'll try on the rest quickly. No need to keep you bored in here."
"No rush. Take your time," Yang replied. "I've got plenty of newspapers to read. Even if I wasn't here, I'd be reading them at the office."
In an era with little entertainment, reading the paper was one of the best ways to pass time.
It had been over four years since he transmigrated to Hong Kong, and he was beginning to forget what it felt like to use a smartphone or browse the internet.
He'd gotten used to passing time with newspapers and all kinds of books.
"Alright," Bai Yushan laughed.
Yang added, "Make sure to pick a good-looking dress. You only get one chance to wear it in your life."
"Mm," she nodded again, then said, "But I do need to hurry a bit — we're having lunch with Mr. Sanders later, remember?"
"There's still an hour and a half. No need to rush," Yang said. "Go ahead."
"Okay." She took a sip of water and headed back toward the dressing room.
The store clerks immediately swarmed around her like stars orbiting the moon.
Once she was inside, Yang went back to reading the newspaper. Politics had been especially eventful lately, and he'd been following developments closely.
Around noon, after Bai Yujie left, Yang and Bai Yushan — now both dressed formally — arrived at an upscale Western-style café in Central.
"Mr. Sanders, good afternoon."
In a private room, Yang greeted the man himself.
"Mr. Yang, Cassie — or should I say, soon-to-be Mrs. Yang?" Sanders smiled.
"Either is fine," Yang said with a smile. "The wedding's less than a month away."
The ceremony was scheduled for next month. It wouldn't be a grand affair — not because Yang didn't want one, but because of cultural customs in Hong Kong.
"Congratulations," Sanders said.
"Thank you," Yang replied. "And congratulations to you too, Mr. Sanders, on your upcoming appointment as Chief Manager of HSBC."
"Haha, Mr. Yang, always so well-informed," Sanders chuckled. "To be honest, I owe this promotion largely to the fact that I've spent years pushing for deeper cooperation between HSBC and Chinese-owned businesses.
Over the past decade or so, Chinese enterprises in Hong Kong have sprung up like bamboo shoots after the rain. That growth has brought unprecedented opportunities to the banking sector. In contrast, the old British firms — though still large — seem to have little room left to grow."
"That's largely thanks to the support of banks like HSBC," Yang said. "Without the banking sector's support, it would've been nearly impossible for Chinese-owned factories, real estate firms, and shipping companies to develop."
Shipping and real estate were obviously capital-intensive and completely reliant on banks. But even industrial operations required financial support.
Most Hong Kong factories in the early days relied on bank loans to get started. The rise of new banking stars like Liu Chong Hing Bank and Hang Seng Bank stemmed precisely from spotting that opportunity.
Sanders nodded. "Well said. This is the kind of partnership we hope to maintain — mutual benefit between our bank and companies like yours. I hope we can continue working together just as closely."
"I hope so too," Yang replied. "This year, Changxing Shipping will continue acquiring second-hand cargo ships from around the world. I hope HSBC can continue to support us financially."
Although Changxing already had over 20 second-hand cargo ships, that number was still far from enough. Compared to industry veterans like Swire or Wheelock, and even to individuals like Tung Hao-yun or Zhao Congyan, Yang still had a long way to go.
So yes — he needed more ships. Even if one day Changxing didn't need them all, the rapidly growing global trade would. And in the short term, the mainland still needed grain transported and Hong Kong still needed water shipments.
"Mr. Yang, are you really planning to continue large-scale purchases of second-hand ships?" Sanders asked curiously. "Given your financial strength, you're more than capable of ordering new ships. Even if you want to buy in bulk, banks here or in Japan can provide the necessary loans."
"I know. I do plan to order new ships — probably in the second half of this year," Yang replied. "But I won't stop buying second-hand vessels. They're simply faster to acquire."
New ships had many advantages, sure — but they still had to be built one by one. Leaving aside shipyard capacity and other orders in the queue, the fastest timeline for a basic 10,000-ton cargo ship was ten months. Larger ones took even longer.
Used cargo ships, while older and harder to maintain, could be acquired quickly and could immediately scale up Changxing Shipping's tonnage — crucial for responding to the shipping crisis triggered by the Middle East oil shock.
And more importantly, they were available now.
"Seems like Mr. Yang is aiming to become Hong Kong's next shipping king as quickly as possible," Sanders chuckled, then asked, "So, how many tons of cargo ships are you planning to acquire in the second half of this year?"
HSBC had already lifted many of its restrictions on shipping-related investments, and naturally, they needed to seize the opportunity — especially with a client like Yang Wendong, who regularly moved projects involving several million, even tens of millions, of U.S. dollars. For such massive ventures, it was only fitting that HSBC's top executive personally stepped in.
Yang Wendong replied, "I can't give you a fixed number just yet, but the total tonnage won't be small. I'm planning to look into purchasing large oil tankers or ultra-large cargo vessels — each potentially in the 50,000 to 100,000-ton range."
With the container shipping era on the horizon, continuing to purchase large quantities of standard 10,000-ton new cargo ships posed a significant risk. Not in the sense of losing money — but in terms of opportunity cost. The same investment might yield lower returns compared to alternative options.
However, large vessels designed to carry bulk commodities — like oil tankers or ore carriers — were irreplaceable. If anything, tonnage would just keep getting bigger.
That's why Yang's strategy was to purchase small-tonnage second-hand ships while gradually investing in large new vessels. Larger tonnage meant lower per-unit transportation costs, giving him long-term competitiveness.
Back in 1959, the legendary shipping tycoon Tung Hao-yun had purchased a 100,000-ton oil tanker from Japan. It reportedly paid for itself in just three years, and everything after that was pure profit.
"Mr. Yang wants to enter the oil tanker market? That's quite risky," Sanders raised an eyebrow.
Yang Wendong replied calmly, "There's some risk, yes. But isn't all business about balancing risk and reward?"
In the early days of Changxing Shipping, Yang had no intention of entering the oil shipping business. Even with insurance, a major oil spill could still mean devastating losses.
But now, with his company growing stronger, his ability to absorb risk had significantly improved. On top of that, modern oil tankers used multi-compartment designs. Even if a leak occurred, the loss and environmental damage would be greatly reduced.
And incidents like that were incredibly rare. With thousands of tankers at sea every year, major oil spills were few and far between — sometimes years apart.
"Well said," Sanders nodded in approval. "If Mr. Yang intends to buy new ships, HSBC will fully support you.
As for second-hand vessels, we can assist too — though the interest rate would be higher. That's just standard banking practice."
"No problem, I understand," Yang replied with a smile.
Higher risk meant higher returns — just like the oil shipping business. Rates were significantly higher than those for other types of cargo precisely because of the inherent risk.
Sanders, unaware of the looming global shipping crisis, naturally saw second-hand ships as a higher-risk asset. It made sense that financing them required higher interest.
"To a successful partnership, then," Sanders said, raising his coffee cup in a symbolic toast.
"Likewise," Yang replied, clinking his cup.
After a short pause, Sanders asked, "Mr. Yang, I hear your Four Seasons Hotel is about to break ground?"
"Yes, we're about to begin excavation for the foundation," Yang confirmed.
Just a few days prior, the official cooperation agreement with I.M. Pei had been signed. His firm's engineers had already started overseeing preliminary construction work.
A project that significant was bound to show up on Sanders' radar.
"Congratulations, Mr. Yang — you'll soon be one of Hong Kong's top hotel moguls," Sanders smiled, then added, "Actually, regarding your real estate investments in Hong Kong, you might also consider working with HSBC."
"If the terms are right, I certainly wouldn't turn it down," Yang said with a polite smile.
It wasn't that he had deliberately chosen to work only with Chinese-owned banks for his property investments. It was just that — for real estate within Hong Kong — the terms offered by HSBC and Standard Chartered often weren't as favorable as those from Chinese banks.
That was normal. It was just like how in his past life, China's Big Four banks often offered more rigid loan terms compared to smaller local banks, which had to compete by being more flexible.
And as a transmigrator who knew the future, Yang had the inside scoop on which "small banks" were destined to face trouble — and which would stay stable. Since he could safely avoid risk, there was no reason not to take advantage of better terms.
"Fair enough," Sanders nodded. "But HSBC has stronger capital reserves. Considering the scale of your future real estate investments, working with us would be much more convenient."
Yang nodded as well. "Alright, I'll consider HSBC for future projects."
"Good," Sanders smiled, then added, "Mr. Yang, I also have some news that might interest you."
"What news?" Yang asked, curious.
Instead of answering directly, Sanders countered with a question: "Are you familiar with Watsons?"
"Watsons? Of course — the soda and herbal medicine retailer," Yang replied, then added with a raised eyebrow, "Why do you bring up Watsons, Mr. Sanders?"
In his previous life, Watsons had become a retail giant — one of the two dominant supermarket chains in Hong Kong, thanks to its ParknShop brand. Its branded cosmetics stores had spread all over the world, making it one of the largest cosmetic retailers globally.
But that success was largely due to Li Ka-shing. After acquiring Hutchison Whampoa in the '80s, he focused on expanding Watsons' retail arm, turning it into the retail empire it became.
Watsons' actual history went way back — all the way to the early 19th century. It had originally sold herbal medicine and soda.
Though it had a longer history than even HSBC or Jardine Matheson, its growth had been sluggish. It wasn't until it fell into Li Ka-shing's hands that it was truly revitalized.
Sanders explained, "Watsons has long been one of HSBC's clients. But in recent years, their business performance has been dismal — the company has suffered significant losses.
The current management is considering selling the business. Jardine and Swire have both declined, stating they're not interested. As the main creditor, I'm now trying to find a suitable buyer."
"You're suggesting I acquire Watsons?" Yang felt a spark of interest but kept his expression neutral. "But that company doesn't really align with my businesses. What would I do with it?"
He might have been interested, but he had no intention of showing it — not yet. Downplaying things was always the smarter move.
Sanders chuckled, "Watsons may be underperforming now, but it's still the largest pharmaceutical retailer in Hong Kong. It also owns a soda production plant and sales network.
Aren't those things of interest to you? With your business acumen, I believe you could take both divisions and turn them around."
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