The Star Online: Business
The Star Online: Business |
- Adrian Cheng: updating a Hong Kong family empire for a changing China
- Wall Street Week Ahead: Correction talk gets old as rally sails along
- China April housing inflation quickens to two year high
| Adrian Cheng: updating a Hong Kong family empire for a changing China Posted: 18 May 2013 07:05 AM PDT HONG KONG: He has trained on Broadway and been a Wall Street banker. Now, Adrian Cheng, 33-year-old scion of the world's largest jewellery retailer and one of Asia's leading property developers is gearing up for his latest challenge - modernizing his family's $25 billion empire for what he calls a "new era". The grandson of Hong Kong billionaire Cheng Yu-tung, who built up jeweler Chow Tai Fook (1929.HK) and real estate titan New World Development (0017.HK), Cheng is one of a new generation of business leaders in Asia who are taking over the corporate reins from their ageing rags-to-riches forebears. He and contemporaries including Martin Lee, vice-chairman of Henderson Land (0012.HK), Victor Li, deputy chairman of Cheung Kong (Holdings) (0001.HK), and Melco Crown Entertainment (6883.HK) boss Lawrence Ho bring an international education and a digital savvy to family-owned empires that have been run along traditional lines for decades. A former Goldman Sachs and UBS banker, Cheng says he is trying to change the corporate culture by removing boundaries and hierarchy within the group. "Change is a big word that everyone is using. (United States President Barack) Obama uses it, but you have to actually feel it," he says, laughing. Ranked by Fortune as one of the world's youngest billionaires, Cheng's business challenges are a far cry from those of his grandfather, who began as a trainee at Chow Tai Fook after the Second World War, when the retailer sold others' products on consignment. The young tycoon, who studied at boarding school in the United States, Harvard University and then took an arts and culture programme in Japan, says his mission is to equip the family business to cater to diverging retail trends in a rapidly changing Chinese market. "Back then the demographics were very different. It was more simple minded. These days China is so big, it has become a really melting pot market," says Cheng, dressed fashionably in a charcoal grey jumper and black jacket. MORE ENTREPRENEURIAL With his father, Henry, as chairman of Chow Tai Fook and New World, Adrian is becoming more involved in the group's overall strategy. He was appointed joint general manager of the property arm last year in line with his grandfather's succession plans, and is an executive director of the group's jewellery arm. Chow Tai Fook, which listed in Hong Kong in 2011 and is now valued at $14 billion, has more than 1,800 outlets throughout China. The jeweler focuses on three areas: the VIP segment, entry-price buyers and e-commerce, which is growing at a rapid pace. Sales were HK$25 billion ($3.2 billion) in May-September last year. New World Development, valued at $11 billion, has a property network that extends from first-tier cities such as Beijing and Hong Kong, where it operates the Renaissance Harbour View and Grand Hyatt hotels, to fast-developing industrial cities such as Anshan in Liaoning province. Cheng says his business approach is more entrepreneurial than that of large corporates. An advocate of developing arts and culture, he is expanding his own K11 brand, developing 'art malls' across China. Hong Kong's K11, located in a busy shopping district in Kowloon, has playful ceiling installations and prominent statues, including a winged neon-pink pig, to interact with visitors. A key priority is to position brands internationally, says Cheng, who sits on the Tate Modern's Asia-Pacific Acquisitions Committee in London. Parties and exhibitions in European cities like Paris are regular events, while annual auction dinners in Hong Kong aim to grow the base of high net worth VIP customers. "They (VIP customers) have been abroad and seen the most expensive stuff. Now it's not about how big the jewellery is. They care more about the design, the subtle sophistication and they want more craftsmanship," Cheng told Reuters in his understated office 32 storeys above Hong Kong's central district. His family owns the entire building, known as New World Tower, one of Hong Kong's larger skyscrapers. Chow Tai Fook's products range from gold bars and diamond rings for China's burgeoning mass market to million dollar custom-made pieces such as the Carmine Flight, a pink flamingo neckpiece with fuchsia sapphires. The group has more than 1 million VIP customers in mainland China and 100,000 in Hong Kong - so many that it has had to sub-categorize them into the "really high-end honorable VIPs, mid-range VIPs and lower-tier VIPs." "Younger generation management revamping family businesses has been quite prevalent in Hong Kong and China recently," said Aaron Fischer, head of Asia consumer and gaming research at CLSA. "Adrian Cheng is one of the prime examples, revolutionizing the corporate culture at the family business with fresh ideas and introducing international best practices." CHANGING MINDSETS The move to target specific types of customers across China is reshaping the company internally to help it deal with what Cheng calls a tipping point. "Changing corporate culture, changing people's mindsets and motivating them to follow your vision is the hardest because that needs a lot of granular commitment," said Cheng, who was trained in classical singing, opera and Broadway music from the age of 12. Sophisticated e-commerce platforms are being rolled out, with a 24-hour support team to react swiftly to any complaints seen on mini-blog sites. Some new collections are only sold online. "It's getting more competitive because everyone's going in (e-commerce)," said Cheng, adding the group expects to triple online sales each year for the next five years. Amid all the change in a fast-growth China and online, Cheng holds on to some of his grandfather's basic business tenets - such as understanding what the customer wants, having confidence and liking what you do, and, most importantly, creating a stable ship, he says. "You need to make sure everything is very stable and is going towards the right direction. Sometimes you need to go back," he adds, noting some firms dive into China too quickly. Straddling the family's two main business pillars, Cheng sees potential cross-benefits between the jewellery and property arms for Chinese VIP customers. A regular jewellery buyer, for instance, could be offered a small discount on real estate. "Things are changing so intricately and suddenly it (demand) will just explode and grow exponentially," says Cheng. "If you don't see the wave underneath that is growing and catch the trend, you will miss the boat." - Reuters |
| Wall Street Week Ahead: Correction talk gets old as rally sails along Posted: 18 May 2013 06:57 AM PDT NEW YORK: With the broad S&P 500 Index <.spx> gliding once again into uncharted territory and posting four straight weeks of gains, the talk of Wall Street's rally inevitably hitting a ceiling is starting to get old. Concerns about a technical correction have been a hot topic for weeks, especially as the rally accelerated in May - the S&P 500 is up 4.4 percent so far this month and up nearly 17 percent for the year. But as the three major U.S. stock indexes inch higher and higher to set record after record, many analysts are shrugging off the pullback worries. "There isn't a technical level that we have in mind at this point when making decisions. The momentum is really strong, and riding along that momentum is what we should have in mind at this point," said Cam Albright, director of asset allocation at Wilmington Trust Investment Advisors in Wilmington, Delaware. The S&P 500, which rose above the 1,600 level only about two weeks ago, is now less than 40 points away from 1,700. As the market continues its upward move, some market participants are beginning to believe that the rally is not a bubble but rather the start of a new bull market. Others argue, meanwhile, that the strong momentum is not based on fundamentals like economic data or corporate earnings but is relying heavily on easy monetary policy from global central banks. Regardless, the consensus in the short term is that the market will avoid two of Wall Street's most popular maxims - "sell in May and go away" and "summer doldrums" - and maintain the upward momentum. With earnings season coming to a close, next week's focus will be on the U.S. Federal Reserve. Chairman Ben Bernanke will head up to Capitol Hill on Wednesday morning to testify on the economy before the Joint Economic Committee. The minutes from the Federal Open Market Committee's most recent policymaking meeting on April 30-May 1 will be released on Wednesday afternoon. Preparations for the Memorial Day holiday on May 27 will probably cut trading short, and most market action is likely to be completed by mid-week. Lighter trading volume may also trigger slightly higher market volatility. FEAR NO MORE Along with the S&P 500, the Dow Jones industrial average <.dji> has been setting a string of record highs. The Dow has gained 17.2 percent for the year. The Nasdaq Composite Index <.ixic> is up 15.9 percent for 2013 so far. On Friday, the Nasdaq closed at its highest level since October 2000. Even at these levels, a popular options gauge shows investors are placing optimistic wagers on the stock market, positioning for the current run-up to extend for the next three months. Earlier this week, the Credit Suisse Fear Barometer, known as the CSFB Index, fell 11.4 points over the past two weeks - the largest decline on record - and is now at a one-year low of 21.73. The indicator essentially tracks investors' willingness to pay for downside protection with zero-premium collar trades that expire in three months, using S&P 500 index <.spx> options. "It's unusual to see at these levels that there are very few indications (based on options activity) that investors are expecting a pullback," said Randy Frederick, managing director of active trading and derivatives at Charles Schwab in Austin, Texas. The CBOE Volatility Index, or VIX <.vix>, Wall Street's fear gauge, is down more than 1 percent for the week. The options market is a popular place for investors to hedge against a sudden fall in the stock market. Among the most popular strategies are put options on the S&P 500 index, and call options on the VIX, which generally moves inversely to the S&P 500. "Even if we see 1 (percent) to 2 percent decline, that will be just another opportunity for people to get into the market," Frederick said. Next week's economic indicators include existing home sales for April on Wednesday, followed by weekly jobless claims and new home sales for April on Thursday, and durable goods orders for April on Friday. In earnings, a number of retailers' results are expected next week, including Home Depot |
| China April housing inflation quickens to two year high Posted: 18 May 2013 06:53 AM PDT BEIJING: China's housing inflation accelerated to its fastest pace in April in two years, driven by a jump in prices in Beijing and Shanghai, complicating the task of policymakers trying to cool the property sector while supporting economic expansion. Average new home prices rose 4.9 percent last month from a year ago, after a year-on-year increase of 3.6 percent in March, according to Reuters calculations from data released by the National Bureau of Statistics(NBS) on Saturday. The rise was the sharpest since April 2011. Rising home prices have reignited concerns about property inflation, adding to pressure on policymakers who are struggling to curb house prices and still spur a strong economic recovery. "The market expectations on rising home prices have not changed thoroughly and the property tightening campaign is still at a critical stage to strictly enforce (curbing measures)," Liu Jianwei, a senior statistician at the NBS, said in a statement. Worried about a rebound in home prices, China's government unveiled a fresh round of measures in March to try to cool the sector, though those measures were less stringent than market expectations. New home prices in Beijing rose 10.3 percent in April from a year earlier and Shanghai's prices were up 8.5 percent in April from a year ago. Both marked the fastest year-on-year gains since January 2011 when NBS changed the way it calculated data. China's fight against property speculation has headed into its third year but many middle-class Chinese are still priced out of the urban housing market. EASING MONTH-ON-MONTH GAINS ON CURBS However, on a monthly basis, new home prices rose 1 percent in April, easing from March's gain of 1.2 percent, the NBS data showed, providing tentative signs that recent government moves to ward off property bubbles are biting. Home prices rose month-on-month in 67 of 70 major cities monitored by the NBS in April, down from 68 in March. The accelerating year-on-year home price gains were mainly caused by low bases last year as over 60 percent of 70 cities saw month-on-month price drops last April, said Liu. China's home prices began their latest climb in mid-2012 when the central bank started expanding monetary easing as part of Beijing's growth-supporting policies. "Going forward, we expect property sector policy to stabilize in the coming months and see a modest property recovery to continue," Tao Wang, an economist at UBS, said in a note to clients before the data was released. "Meanwhile, the recent property tightening, including administrative price controls, may keep property prices from rising too rapidly in a few large cities," Wang added. Reuters started its weighted China home price index in January 2011 when the NBS stopped providing nationwide data, only giving home price changes in each of 70 major cities. - Reuters |
| You are subscribed to email updates from The Star Online: Business To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
| Google Inc., 20 West Kinzie, Chicago IL USA 60610 | |
0 ulasan:
Catat Ulasan