Xi rewrites China's rags to riches tale

Nongfu Spring

15/01/2021 02:26

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are her own.)
    By Yawen Chen
    HONG KONG, Jan 15 (Reuters Breakingviews) - Getting rich in
China isn’t what it used to be. Little known Zhong Shanshan sits
atop an $84 billion fortune - Asia’s largest - thanks to bets on
bottled water and vaccines. His unlikely rise reflects a new
economy under President Xi Jinping. 
    The 66-year-old Zhong is currently ranked the 8th richest
man in the world, according to a real-time index from Forbes,
ahead of former Google head Larry Page and India’s Mukesh
Ambani. The enigmatic billionaire is best known for his beverage
empire Nongfu Spring  9633.HK . Its shares have nearly tripled
since they debuted in Hong Kong in September, giving the company
a market capitalisation of $86 billion as of Friday morning.
Zhong’s other venture, Wantai Biological Pharmacy  603392.SS ,
has seen its stock rise some 150% in Shanghai over the same
period.
    Zhong stands out as a “lone wolf” due to his low public
profile and lack of visible political and business alliances. In
a rare 2015 media interview, the beverage magnate belittled
internet companies as merely “putting goods online” and bashed
real estate groups for hijacking the economy.
    That looks prescient. Beijing has renewed a crackdown on
indebted property developers like Hui Ka Yan’s China Evergrande
 3333.HK . The abrupt regulatory halt to Jack Ma’s financial
technology group Ant’s initial public offering and anti-trust
investigation into Alibaba  BABA.N   9988.HK  also signal Xi is
reining in the country’s internet giants. Ma and Hui’s global
Forbes rankings have fallen in 2020.
    At the same time, investors have piled into consumer plays
in the People’s Republic, minting a new class of billionaires.
The $415 billion liquor-maker Kweichow Moutai  600519.SS  is the
most valuable-listed company in mainland China, worth nearly
three times Diageo  DGE.L  and Pernod Ricard  PERP.PA  combined.
And according to the Forbes’ richest list, the biggest gainer in
2020 is a Chinese pig breeder. 
    The increasingly frothy valuations risk attracting the ire
of Xi, who is already busy stamping out bubbles in property,
electric cars, chips and elsewhere. That puts Zhong at the mercy
of investor whims and official policy. Moreover, growth in
bottled water sales is forecast to slow, while his
pharmaceutical company relies on government subsidies. As with
water, riches can flow right out of one’s hands - especially in
China.
    On Twitter https://twitter.com/ywchen1
    
    CONTEXT NEWS
    - Zhong Shanshan, chairman of bottled water company Nongfu
Spring, has a net worth of $83.9 billion as of Jan. 15,
according to Forbes. That makes him the 8th richest person in
the world.
    - For previous columns by the author, Reuters customers can
click on  CHEN/ 
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Forbes article    https://www.forbes.com/sites/jenniferwang/2021/01/05/chinas-bottled-water-mogul-gains-5-billion-in-one-day-becomes-worlds-sixth-richest-person/?sh=2ee62d0e792d
Forbes’ real time billionaire list:    https://www.forbes.com/real-time-billionaires/#7e8d59553d78
BREAKINGVIEWS-Chinese beverage IPO turns water into beer   
 urn:newsml:reuters.com:*:nL4N2FU09V
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 (Editing by Robyn Mak and Katrina Hamlin)
 ((yawen.chen@thomsonreuters.com; Reuters Messaging:
yawen.chen.thomsonreuters.com@reuters.net))