Behind the success of Li Ka-shing, the world's 8th richest
Staff Reporter 2013-03-17 11:46
Hotels and residential buildings in Hong Kong. (File photo/CNS)
With his assets pegged at more than US$31 billion, Hong Kong business magnate Li Ka-shing has been declared by Forbes as the world's eighth richest person in the world as at the end of March.
Li's wealth was enhanced by a near-20% jump in the prices of his stock, mainly in Hutchison Whampoa, Cheung Kong Holdings and Huskf, in addition to combined dividends of US$850 million.
Li's success is attributable to his astute business sense of selling — mainly Hong Kong property — at peak prices and buying out companies at low prices, according to the Shanghai-based First Financial Daily.
For instance, Li sold one of his four hotels in Hong Kong on Feb. 18. The 360 suites in that hotel were sold out in just two days for HK$1.4 billion (US$180.47 million). He sold the hotel four days before Hong Kong authorities increased a stamp tax on residential and commercial buildings to put a dampener on surging real estate prices.
A similar incident took place in 1997, when Li's group had sold a batch of luxurious houses located in Hong Kong's New Territories for unprecedented high prices and before the onset of the Asian financial crisis. The current market prices for these houses are still lower than their 1997 prices, the First Financial Daily pointed out.
On the other hand, the business magnate was also buying European companies on a large scale. Thanks to an aggressive buying spree in the United Kingdom, Li's group now reportedly controls nearly 30% of the country's natural gas market, a quarter of its electricity retail industry, and half of its water-supply business.
A notable example was Orange, a telecommunications company founded by Li's Hutchison Whampoa in 1994 in the UK. Li's group had sold Orange in 2000 to German telecommunication giant Mannesmann and pocketed a profit in excess of hundreds of billions of Hong Kong dollars.
In 2012, Li's group bought back a stake in Orange again, at prices much lower than what he had sold the company for in 2000.
"I bought Orange back when Europe was plunged into an economic crisis, because I believe the company's business will recover over five years," Li said at a news conference in August 2012.
Originating in Hong Kong, Li's group now operates in 53 countries globally. Its overseas assets account for 80% of the group's total fortune and its international workforce is pegged at more than 200,000 against its 40,000 Hong Kong workers.
