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 TIMES

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


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.     

We have 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 weekend's sales.

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 weekend's prices.

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 ft.

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 interest
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 foot.

"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 balconies."

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 cent.

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 sales."

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    SOUTH CHINA MORNING POST

SHKP named Asia's Best Property Company

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 month.

Sources said DBS Bank (HK) was a potential tenant of the 88-storey tower, Hong Kong's tallest building.

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    HK Standard   

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 said.

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 and offices.

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 Kong Standard      

Buyers from mainland lift SHKP sales

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 last month.

``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 the project.

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 said.

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   Hong Kong Standard  

SHKP sees a future building townships

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 approach.

"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 this year.

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 Kowloon.

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   South 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

Kowloon Station Tower -  Tall at 102 storey

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 point".

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 in Shanghai.

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                               

  • Vancouver's 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 business.

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 baroque standards.

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 businesses."

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 Properties.

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 service provider.

"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. Lai's company.

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 businessman.

"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,, which prompted a near-riot among investors when it went public last February. 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


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