The bellwether of Hong Kong's all-important property industry, Sun Hung Kai under the Kwok brothers has
established a leadership position through decades of strict quality control
and a superior corporate image, constantly commanding a price premium of
more than 10 per cent above its competitors. Last year was
particularly impressive for Sun Hung Kai, which picked up one in every three
dollars spent on the city's new home purchases. In comparison, the
company's nearest rival - Cheung Kong, controlled by billionaire Li Ka-Shing
- had a 19 per cent share in a market worth a record HK$133.3 billion
(S$21.6 billion) in 2011, according to Centaline Property Agency, the city's
largest broker. >>
2012 March 31 BUSINESS
Its being called the 'Sun Hung Kai
storm', after the arrest of the two joint chairmen of the city's largest
real estate developer sent property stocks tumbling in Hong Kong
- Eek! The Chair &
Executive Director arrested
So odd because
Thomas Chan is highly regarded and reputation for being squeeky clean
CLICK ARTICLE to view
One of our favourite clients is Sun Hung Kai
Properties. Firstly our fathers knew each other.
This was way back when T.S. Kwok was not yet a billionaire.
My Father sold them their house back when the current managing brothers were
teenagers and in high school.
a professional connection with this group having secured the real estate
portfolio of a major institutional investor in North America on their behalf. We
acted as broker for this portfolio purchase and did
more than half a dozen trips with the principal and his team of
professionals. The North American institution could not believe
the level of due diligence for this ~ $100 million (North American currency)
investment! We cannot say more than that.
Sun Hung Kai Properties are global
investors. We continue to keep our eyes open for opportunities
that could be of interest to them. We therefore include
significant articles as backgrounder for those who may not have heard of
them and by no means comprehensive.
The Kwok family are principals of this
highly regarded group.
Park Island sale reaps
$2.6b for developer
Sun Hung Kai Properties (SHKP) reaped up to HK$2.6 billion
from the sale of 1,000 Park Island flats at the weekend.
Most of the Oceanfront units, at Park
Island phase 3, were priced between HK$3,500 and HK$3,700 per square foot
but flats with better views went for up to HK$4,600 psf, SHKP executive
director Victor Lui said.
He said the solid sales indicated a
return of confidence among homebuyers.
``As more new residential projects will
be launched in the second half of the year, I expect to see a 5-10 per cent
price rise by the end of 2004.''
Real estate agencies estimated the
developer pocketed between HK$2.5 billion and HK$2.6 billion from the
Agencies said more than 30 units were
placed back on the market for immediate resale at a mark-up of between 4 per
cent and 20 per cent.
``But I don't think speculation is
prevailing at our development,'' Lui said. ``About 20 per cent of buyers
were investors, and most of them are looking long-term.''
More than 8,360 subscriptions have been
received from potential buyers for the 1,446-unit project.
The sale was suspended last night but is
expected to resume next Saturday. Sources said SHKP intends to retain about
200 units and would sell the remainder at a 15-20 per cent premium to the
Market observers believe the Ma Wan
project should help set a price benchmark for the market, which has reported
sluggish sales over the past few weeks.
Flat prices jumped an average 20 per cent
in the first quarter and as much as 40 per cent for luxury properties.
But transactions have slowed in the
second quarter, and analysts estimate prices have slipped 3-5 per cent over
the past 10 weeks.
Oceanfront consists of seven blocks of 26
or 27 storeys. Standard units range from about 680 square feet to 1,100 sq
In addition, there are 26 ``Park
Rise'' penthouses of about 1,300 to 1,500 sq ft. -
by Eli Lau HONG
KONG STANDARD 14 June 2004
Oceanfront flats draw strong
Buyers face price rise of up to 20pc on remaining
units of Ma Wan residential project
The first major residential project to go
on sale since the government's resumption of land auctions was the subject
of strong interest from homebuyers and property investors at the weekend.
Sun Hung Kai Properties sold about 1,000
units of Oceanfront, the third phase of its Park Island project in Ma Wan,
in internal sales at an average of between $3,500 and $3,700 per square
"This is about 10 to 15 per cent higher than the secondary prices in
the neighbourhood," a Midland Realty property agent said.
"Most of the purchasers are
homebuyers, who seem willing to pay a higher price for the presence of
Centaline Property Agency sales manager
Fred Chau said the remaining 440 or so units of Oceanfront - mainly those in
Block 25 and upper-floor flats with three bedrooms in other blocks - would
go on sale on Saturday.
Ms Chau said the developer had indicated
buyers could expect a price rise of 15 to 20 per cent.
The Ma Wan residential development
garnered much market attention. On the buyers' side, it has drawn 8,000
applicants for the 1,446 units since it started collecting registrations
late last month, while on the seller's side, Sun Hung Kai Properties teamed
up with HSBC to pioneer cheap loans for property buyers.
To boost sales, Sun Hung Kai Properties
and HSBC have offered a fixed-interest rate as low as 0.38 per cent for the
first year of a mortgage, prime minus three percentage points for the second
year and prime minus 2.7 percentage points for the rest of the term.
With Hong Kong's economic fundamentals
significantly improved in the 14 months since last year's Sars outbreak, the
prices of small to medium-sized flats have jumped more than 40 per cent,
while prices of luxury flats have risen between 50 per cent and 100 per
But some market watchers expect prices to
decline by about 10 per cent from their recent peak.
"Speculators who bought flats in
March and April this year are likely to be trapped at the moment and
developers may start cutting prices a bit or offering more purchase
incentives [such as a better mortgage rate] in the near term to speed up
sales in the second half," a property agent said.
"Also, I don't think the aggressive
bids by developers for government land could spur property prices as current
prices are still higher than the projected prices from the land auction
The government will hold another land
auction tomorrow for a residential site in Sa Po Road, Kowloon City.
The market expects aggressive bidding by
property developers to continue as they seek to replenish land banks.
Ricacorp Properties' managing
director Ivan Ho estimated the site would be sold for $887 million, about 30
per cent more than K Wah International Holdings' $682.2 million guaranteed
bid. - 2004 June 14
SHKP named Asia's Best
mainland lift SHKP sales
Sun Hung Kai Properties (SHKP) was named
Asia's Best Property Company of 2003 in a survey conducted by Finance Asia,
a leading regional financial magazine. SHKP got high rankings in the
categories: best corporate governance, best efforts in investor relations
and best managed company. The results show that SHKP's commitment to
openness, transparency and maintaining high standards of corporate
governance are highly appreciated by investors.
Finance Asia polled about 300
analysts and fund managers in the region for its annual Asia's Best
Companies survey. Respondents were asked to rate companies on management,
good corporate governance, efforts in investor relations and more. SHKP
scored highly and was named Asia's Best Property Company. -
16 June 2003
Sun Hung Kai Properties' (SHKP) last
annual report won two more honours in the International ARC Awards: the gold
medal for best report overall and bronze for cover photo/design, both in the
Real Estate sector. These come shortly after CFO Asia magazine named the
same report best from an Asian property developer.
The honours recognize SHKP's
efforts to raise the quality of its corporate communications to a higher
standard. The ARC Awards are among the most highly respected in the
communications industry, and SHKP is gratified to be chosen out of numerous
entries from 35 countries around the world. -
August 11 2003
Income from IFC
`could hit $1.4b a year'
Sun Hung Kai Properties (SHKP) and its partner Henderson Land Development
could generate an annual rental income of up to HK$1.4 billion from the
International Finance Centre (IFC) complex.
SHKP vice-chairman and
managing director Thomas Kwok announced yesterday that a major tenant would
take up 180,000 square feet of office space at Two IFC. Kwok did not
identify the tenant but said a leasing agreement would be announced next
Sources said DBS Bank
(HK) was a potential tenant of the 88-storey tower, Hong Kong's tallest
Kwok said several Asian
banks had also inquired about tenancy at Two IFC.
He said annual rental
income from the complex could reach HK$1.4 billion if it was fully let. Some
HK$200 million would come from the office tower in Phase I, HK$300 million
from Phase II, HK$200 million from the shopping mall, and HK$600 million
from the hotel and serviced apartments.
More than 50 per cent of
the 1.9 million sqft floor area of Two IFC has now been leased. ``We expect
the occupancy rate to rise to 60 to 70 per cent by February or March next
year and top 95 per cent by October next year,'' Kwok said.
Henderson Land deputy
chairman Colin Lam said the company would occupy the 72nd, 73rd, 75th and
76th floors of Two IFC, a total floor area of about 100,000 sq ft. Lam said
Henderson would move into the offices in the middle of next year.
Kwok said net effective
rents at Two IFC had increased from HK$20 per square foot two months ago to
about HK$25 to HK$30 psf.
He predicted Grade A
office rentals would rise 20 to 30 per cent over the next three years, when
supply of new office space would be lower than the average of the past 10
years, at 2.08 million sqft annually.
``The rental market for
Grade A offices in Hong Kong has bottomed out and vacancy ratio is also
falling,'' Kwok said. ``A recovering economy and the signing of the Closer
Economic Partnership Arrangement [Cepa] trade deal will help boost demand
for offices in Hong Kong.''
He said about 70 per cent
of the shopping mall at IFC had already been leased, with 90 per cent of the
first floor and 80 per cent of the second floor taken.
Kwok declined to say
whether SHKP was one of the 10 firms to bid for the HK$24 billion West
Kowloon Cultural District project.
Shares of SHKP rose
3.13 per cent to close at HK$66 yesterday. Henderson Land shares rose 3.14
per cent to close at HK$32.8.
- 2003 October 29
Sun Hung Kai Properties (SHKP) will release
nearly 4,000 new flats into the market this year after sales of some
projects were delayed due to the Sars outbreak.
Market watchers said the 3,924 units to
be released this year included 1,040 from Sham Wan Towers in Island South,
326 from 18 Farm Road in Ma Tau Wai, 688 from Fu Tei in Tuen Mun and 22 from
Severn Road at The Peak.
The developer and its joint-venture
partners are also likely to launch 1,080 flats at The Pacifica in Cheung Sha
Wan and 768 flats from Ocean Shores Block 16 and 17 in Tseung Kwan O later
this year, they said.
Meanwhile, executive director Michael
Wong predicted in the company's latest issue of SHKP Quarterly that
gross margins on sales could fall about 18-19 per cent for the whole year.
The smaller margin, which the developer said was reduced from last year but
would not give the previous figure, was the result of a slowdown in sales of
high-margin Central Park in Tseung Kwan O during the Sars outbreak, Wong
The company has achieved 85 per cent of
annual sales targets so far, said Wong, who added that SHKP would make
provisions for Park Island and Ocean Shores Phase 3 out of accounting
prudence, and this would have a slight impact on second-half profit.
The developer said it would consider
selling off some of its non-core assets, in particular, older shopping malls
Wong said sales of about 2,000 units at
Olympic Station would be postponed to allow for changes to the drainage
system in the interest of better health standards. ``There's no denying that
the Sars outbreak caused short-term pain for Hong Kong's economy, but having
said that, I think it also created a new demand that high-quality developers
and other businesses can fill,'' Wong said.
He believed the impact of Sars would only
be temporary and the property market would turn around soon.
SHKP shares yesterday closed at
HK$46.3, up 0.87 per cent. -
2003 August 12 Hong
Sun Hung Kai Properties (SHKP) expects mainland businessmen and corporate
owners to buy up to 20 per cent of the first batch of apartments in its Ho
Man Tin luxury development.
Several mainland manufacturers had
already approached the developer to buy the penthouses even though the flats
would not be officially released for sale for another month, SHKP Real
Estate Agency executive director Victor Lui said yesterday.
``Actually mainland property buyers have
been eyeing luxury housing units in Hong Kong since we launched the Leighton
Hill project in Happy Valley a few years ago,'' Lui said.
``The number of mainlanders investing in
local luxury properties is likely to climb continuously.''
The 31-storey art deco-style project at 1
Ho Man Tin Hill covers 158,000 square feet of gross floor area and has 108
flats plus four duplexes.
At the public sale launch after Lunar New
Year, the developer plans to release about 50 completed standard homes
measuring 1,300 sq ft and 1,950 sq ft, along with two duplexes of 2,500 sq
ft and 3,300 sq ft.
``[For these 50 units] we estimated 20
per cent of buyers will be mainland manufacturers or corporate owners who
travel between Hong Kong and China for business,'' Lui said.
The group expects 10 per cent of the
units at its other luxury project, at 1 Po Shan Road at Mid-Levels, to be
purchased by cross-border buyers.
Lui revealed that a Beijing businessman
had already purchased a Po Shan Road penthouse.
Market watchers said the group had reaped
at least HK$90 million from the sale of two Mid-Levels homes to mainlanders
``Mainland buyers usually request better
property quality and management services, rather than discount packages as
they are able to make the transaction with full payment,'' Lui said.
The other 50 or so Ho Man Tin Hill
apartments would be reserved for leasing at around HK$45 psf for standard
apartments and up to HK$60 for duplexes.
This level of rental returns would be
relatively high given the depressed residential leasing market.
``I have a positive view on the luxury
housing market,'' Lui said, adding that there was room for rental rises for
SHKP estimates it could fetch HK$1.5
billion if all homes are sold.
Meanwhile, SHKP was interested in Ho Tung
Garden, which is widely tipped to be sold by tender later this year, Lui
The property, at 75 Peak Road, is
owned by the Ho Tung family. Lui said the the property would probably fetch
a high price, with a reasonable land premium of HK$7,000 psf. -
2003 January 16
SHKP sees a future building
Kowloon Station Tower - Tall at 102
Hong Kong's biggest developer,
Sun Hung Kai Properties (SHKP), aims to transform itself from a builder of
housing estates into a "facilitator" of integrated townships.
The firm was reacting to market demand
for more comprehensive living environments and well-developed
neighbourhoods, Sun Hung Kai Real Estate Agency sales general manager Eric
Chow Kwok-yin said.
Hong Kong developers generally rely on
podium-based high-rise projects which may include fancy clubhouses but
otherwise offer few community facilities.
Mr Chow said the 2,224 units at SHKP's
YoHoTown, in Yuen Long, due for completion in 2004, represented a new
"The pre-sale consent has already
been issued but the layout design is being revised," he said. "The
first phase for sale next year provides 1,000 two-bedroom units. Some of
them include green features."
YoHoTown, with a gross floor area of 1.18
million sq ft, is near the Yuen Long Station on the West Railway due to open
Reacting to changed buyer tastes, the
firm has reduced the average unit size to 530 sq ft from 828 sq ft.
The project can be connected with another
larger scale development in Yuen Long Town (Lot 504), comprising a 1.45
million sq ft residential area and 249,000 sq ft of retail space, also due
to be completed by 2004.
"A large-scale estate, like a town
development, enables higher flexibility in planning. Only huge sites, mainly
in the rural areas, will be spacious enough to include comprehensive
community infrastructure," Mr Chow said.
He said SHKP was aiming to acquire giant
sites for township developments.
In the coming year it would release 6,000
residential units for sale and hoped to secure sales revenue of HK$15
billion, he said. The target compared with the 5,700 units sold this year.
Apart from YoHoTown, SHKP and Cheung Kong
(Holdings) have a 40:60 joint venture - Vianni Cove in Tin Shui Wai, Yuen
Long - available for pre-sale next year. Its 1,091 units are due to be
completed in December next year.
The first project for sale next year
could be Shum Wan Tower, a mixed development of private and subsidised
housing in Aberdeen. Its 1,040 units were to be finished by April 2004.
"We are now discussing with the
government about the settlement of the units formerly planned for subsidised
housing. The show flats are complete and the project can be released for
sale in the coming two to three months," he said.
Other projects for sale include 1 Ho Man
Tin Hill Road, 18 Farm Road and a joint venture with Cheung Kong in West
Mr Chow expected last month's market
stimulus measures to feed into improved sentiment by the middle of next year
and for the full year predicted total sales of new properties to rise 5 per
cent, with prices to remain stable.
SHKP had no plan to slash prices to
compete with rival projects. - by Sophia Wong
China Morning Post 30 Dec 2002
Sun Hung Kai Properties (SHKP), Hong Kong's
second largest developer, plans to sell non-core assets and put more
resources into larger shopping centres.
The company would dispose of up to 10
small- to medium-sized shopping malls and car parks, totalling 1.5 million
square feet, or 20 per cent of the company's total rental gross floor area,
deputy general manager (leasing) Maureen Fung said in a newspaper report.
Fung said it was difficult to hold
promotional activities in small malls and the company had decided to dispose
of malls with floor areas of around 20,000 sq ft or less to allow the firm
to place more resources into larger shopper centres.
But a SHKP spokesman said yesterday the
company had not identified which of the properties would be sold.
``We've been reviewing our non-core
projects for sale, including shopping centres, but there is no list at this
point,'' the spokesman said. SHKP's profit for the six months to last
December fell 40 per cent from a year ago because it sold fewer apartments.
``They have always wanted to sell
non-core assets, perhaps now they are more eager because the residential
market isn't doing very well,'' GK Goh Securities analyst Roger Luk said.
``It's more difficult to manage a number
of small malls as well.''
SHKP has more than 80 shopping malls
covering about 7.7 million sq ft in gross floor area.
About a dozen of them are around 20,000
sq ft in total floor area.
Its larger shopping centres include the
International Finance Centre in Central, which has 800,000 sq ft and the New
Town Plaza in Sha Tin (Phase One) with 1.3 million sq ft.
There is also the Grand Century Place in
Mong Kok measuring 720,000 sq ft.
It also has about 1.7 million sq ft of
shopping mall space under development.
Analysts said that as the income
generated by its small shopping malls were not significant, the disposals
would not have a large impact on its balance sheet.
The property giant said in March that it
would spend about HK$3 billion to build a commercial project in Shanghai's
Pudong area with a total floor area of 4.5 million sq ft.
``The returns of the smaller malls are
probably lower than expected, and they'd like to focus more in the mainland,
particularly in big cities,'' an analyst at a US-based investment bank said.
SHKP has a large shopping mall in Sun
Dong An Plaza, Beijing, with a total floor area of 1.3 million sq ft.
It also has a smaller one, the
Shanghai Central Plaza, Shanghai, with an area of 125,000 sq ft.
- Hong Kong Standard
16 July 2002
Sun Hung Kai Properties (SHKP) is
planning 102-storey commercial tower at Kowloon Station will house the
world's tallest hotel at the upper zone, creating a "talking
The design is being finalised by New
York-based architect Kohn Pedersen Fox, a firm which also is overseeing the
design of Hongkong Land's Chater House in Central, Hang Lung Group's Plaza
66 in Shanghai and Mori Building's planned 460-metre World Financial Centre
The new Kowloon Station tower design
would provide efficient floor plates in the 480-metre, square building.
The old design had a 100-metre
architectural feature including a transparent atrium, which would have
raised the structure's height to 580 metres.
The 102-storey office-hotel tower is the
phase seven development of the 12 million square foot Kowloon Station
project, now named Union Square, at the southern tip of the West Kowloon
reclamation area overlooking Victoria Harbour.
SHKP has undertaken a large part of the
project, including phases three, five, six and seven. The blueprint for
phases five to seven has been revised in favour of taller buildings to
create more open space.
Phases five and six are combined to
provide two 64-storey towers, instead of 45 storeys previously. One will
include a hotel and serviced apartments while the other a hotel, serviced
apartments and flats. Phase three, is a two twin-tower residential project.
Amoy Properties is building three
residential towers in phase four of Union Square. A consortium led by Wharf
(Holdings) is developing the five-block Sorrento residential project, part
of which is on pre-sale. Phase one, The Waterfront, was completed and
developed by a Wing Tai Asia-led consortium. The developers are all in
partnership with Mass Transit Railway Corp.
Union Square, with 2.5 million sq
ft of office space and nearly one million sq ft of shopping mall, is due for
completion by 2007. - South
China Morning Post
Power 50 (#3)
- In Canada SHKP
subsidiary, ASPAC won bidding war for remaining residential sites in
Vancouver's Coal Harbour and towers presently under construction.
- Aspac Developments Ltd.’s River
Green project adjacent to the Olympic speed-skating oval in Richmond.
The 28-acre project will include 2,600 residential units when it
completes in 10 to 15 years’ time, and is tipped in press materials as
introducing “the same level of sophistication and elegance to
Richmond’s City Centre area that has made Vancouver’s Coal Harbour
one of the world’s most desired residential locations.”
Dynasties must embrace Net era
As the Internet sweeps across the
Pacific, it is undermining the long-held Asian values of family control and
prudence, threatening to erode the dominance of family dynasties unless they
join the revolution
Raymond Kwok, of Sun Hung Kai Properties,
has his eye on Internet technology and the wealth it can bring his family's
HONG KONG -
In this densely packed city, where property is the coin of the realm,
Raymond Kwok is as close as one gets to royalty.
Mr. Kwok's 46th-floor office looks out on
a forest of skyscrapers, dozens of them built by his family. Across the
harbour in Kowloon are sawtooth rows of apartment houses, also built by the
family. The Kwoks' real estate empire is one of the largest in Asia, making
Raymond, 46, and his two brothers fabulously wealthy, even by Hong Kong's
These days, however, Mr. Kwok is worried
about something that has little to do with concrete, glass and steel.
"We always follow closely what is
happening in the U.S.," he said. "In America, we see how
technology is changing business, how technology is creating a lot of new
As the Internet sweeps across the
Pacific, Mr. Kwok believes technology will unleash the same frenzy of sudden
wealth and disorienting change in Asia. If his family wants to keep its
place among Hong Kong's commercial elite, he says, it must join the
revolution. So Mr. Kwok, a Harvard MBA, has devised one of the most
ambitious Internet strategies of any old-line Asian company, creating a
diverse portfolio of Internet startups related to his family's business.
The Kwoks are one of several families of
Asian tycoons who are determined not to be left behind. From Taiwan to
Thailand, the region's most powerful families have started a blizzard of
online ventures. Whether their core businesses are in property,
telecommunications or banking, Asia's tycoons are seizing on the Internet in
hopes of expanding their reach and making even more money.
In the process, the Internet is
transforming the way business is done here and elsewhere in East Asia. With
its emphasis on speed, openness and collaboration, the Net is challenging
traditional Asian values of prudence and family control. Decisions, which
used to be made by the patriarch behind a veil of secrecy, are being pushed
down the ranks as Asian companies embrace Silicon Valley-style management.
"The classic Asian family dynasty
probably isn't the best suited to succeed on the Internet," said Peter
Yip, the chief executive of Chinadotcom, one of Asia's first publicly traded
Internet companies. "But I've been amazed by how quickly they've
learned the business."
Not everyone is so sanguine. Despite
their chameleonlike adaptability, Asia's tycoons may have trouble making the
leap into cyberspace, critics say. For the last quarter-century, the tycoons
rode a wave of double-digit growth. In countries like Indonesia, Thailand
and Malaysia, cozy ties with governments sheltered them from market forces.
"These guys think the Internet will
bring them prosperity for the next 25 years," said Jimmy Lai, a Hong
Kong publisher who is putting his media properties online and starting an
Internet shop-from-home service. "But to unlearn the lessons of the
last 25 years is impossible."
Over time, Mr. Lai (pronounced lie)
predicts, the culture of the Internet will erode the dominance of family
dynasties in Asian commerce. By making information widely available, the Web
will gradually devalue the networks of personal contacts -- known in Chinese
as guanxi -- amassed over decades.
Mr. Kwok, though, thinks he can ride the
technology tidal wave. He spent much of 1999 in the United States, roaming
around conferences and quizzing entrepreneurs.
He discovered some online businesses that
play to the strengths of property owners. One is providing specially
outfitted office space to house computer servers. Another is creating
Internet sites, including chat rooms and bulletin boards, for the residents
of the apartment complexes owned by the Kwok family's company, Sun Hung Kai
Soon, Mr. Kwok packaged his collection of
startups into a holding company, Sunevision, which went public on the Hong
Kong Stock Exchange. While Mr. Kwok is the chairman, he has recruited an
outside executive to run it.
"The mind-set of a technology
company is very different from a property company," Mr. Kwok said.
"We needed to remove a lot of baggage."
For Jeffrey Koo Jr., the challenge was
persuading his elders that the Internet was more than a fad. Mr. Koo, 35, is
a fourth-generation member of a family that controls a vast empire in
banking, telecommunications, cement and cable television.
In talking with classmates from the
Wharton School in 1997, Mr. Koo became convinced that his family had to lash
its future to the Internet. As president of the family's Chinatrust
Commercial Bank, Mr. Koo began taking baby steps online. But his father
turned down his first request for US$10-million to finance an Internet
"My father and his brothers were
against me doing this because they thought of it as a form of
gambling," Mr. Koo said. "When I would talk excitedly about a new
venture, they would look at me blankly."
In Mr. Koo's case, the elders came around
when Microsoft Corp. bought a 10% stake in his startup, Gigamedia, a
broadband entertainment and information service. Earlier this year,
Gigamedia became the first Taiwan Internet company to go public on the
Nasdaq exchange. Although it was caught in Nasdaq's downdraft, it is still
worth well over US$2-billion ($3-billion).
Now, Mr. Koo is developing online banking
and a regional e-commerce service to complement the family's 75% stake in
Gigamedia. Less than two years after his father gave the Internet the cold
shoulder, Jeffrey Jr. said, he now talks constantly about the cyberworld.
To some students of Asian business, this
is merely a new chapter in an old story. Ethnic Chinese families have
traditionally prospered by adapting to new circumstances. Kwok Tak-seng, the
patriarch of the Kwok family, started as a trader in southern China. By the
1950s, he had migrated to Hong Kong and become the local agent for the YKK
zipper company of Japan.
Sensing more opportunity in property than
zippers, Mr. Kwok began building apartment houses. By the 1980s, he was a
leading real estate developer. Mr. Kwok died in 1990, but under his three
sons, Sun Hung Kai grew into a conglomerate with interests in toll roads,
cargo handling and mobile telephones.
"One good thing about old-economy
companies is that they have profits and cash flow," said Raymond's
older brother, Thomas, who oversees Sun Hung Kai's real estate business.
"But old-economy companies need new-economy ideas to survive."
For all their rock-solid stature,
however, Asia's tycoons face challenges from a host of upstarts. Mr. Lai,
the publisher and a self-styled maverick, offers himself as an example. Last
year, he started a venture that lets customers order groceries and other
goods by phone or over the Internet. The company, adMart, delivers from its
warehouses, cutting out the middleman.
In Hong Kong, the middleman for many of
these goods is Li Ka-shing, a billionaire who owns one of two local
supermarket chains. When Mr. Lai's delivery business began to pinch Mr. Li's
stores, he cancelled his company's advertising in Apple Daily and Next
magazine, the outspoken newspaper and weekly magazine at the heart of Mr.
For Mr. Lai, the lost revenue has hurt.
But after years of tweaking Hong Kong's establishment in his newspaper, Mr.
Lai relishes mounting a frontal assault on its most powerful local
"I could never take on Li Ka-shing
before," Mr. Lai said. "But if I'm riding on the back of a huge
market force like the Internet, then even he can't stop me."
But Li Ka-shing has started e-commerce
ventures of his own, through his two companies, Hutchison Whampoa and Cheung
Kong Holdings. He also backed a Chinese-language portal, Tom.com, which
prompted a near-riot among investors when it went public last February.
Tom.com tumbled in the global sell-off of technology stocks. But thanks to
Mr. Li's gold-plated reputation, it still trades above its offering price.
Richard Li, the son of Li Ka-shing, is
pushing his family's new Internet vision even further. Just 33 years old,
the younger Mr. Li is the brashest Internet entrepreneur in Hong Kong and a
symbol of Asia's headlong flight into cyberspace. His two-year-old company,
Pacific Century Cyberworks, recently won a US$36-billion takeover battle for
Hong Kong's main telephone company. He is also building a
satellite-delivered Internet service.
The young Mr. Li epitomizes the
contradiction in Asia's version of the Internet. A scion of the Li dynasty,
he has created a cyber-age company crackling with the energy of employees
hoping to strike it rich on stock options. Yet he would never have triumphed
unless the Bank of China arranged a US$12-billion syndicated loan to finance
the deal. And analysts agree that Mr. Li would never have landed such a loan
without his father's connections
- Mark Landler The
New York Times National
Post 30 May 2000