Rich list: HK property tycoons lead the way

Every year FinanceAsia compiles a list of Asia ex-Japan’s richest business families according to the dividends paid to them through their shareholdings in publicly listed assets. Hong Kong property developer Lau Luen Hung “Joseph” heads the list this year, knocking last year’s winners, the Cheng family of Hong Kong-based luxury retailer Chow Tai Fook Jewellery, into second position.

Hong Kong property tycoons Li Ka-shing, Lee Shau Kee, and the Kwok family make up the rest of the top five.

Lau’s status as our richest person in Asia by dividends differs markedly from other rich lists that use net worth as a measure of wealth – he is 13th according to Forbes and 35th according to Bloomberg. However, we believe that our unique focus on dividend payouts provides a more dynamic picture of wealth creation and cash flow in the region than estimations of net worth.

“People tend to ignore dividends as a bit of a boring, minor increment,” said Geoff Bazzan, head of Asia Pacific equities at Sydney-based investment management firm Maple-Brown Abbott, “whereas in the long term it’s very powerful, particularly in lower-return environments, which, if you believe the consensus, that’s what we’re in for.”

We determined share count positions and ownership stakes by analysing annual reports and other company stock exchange filings. Where the holdings are opaque, such as complex cross-shareholding structures or shares owned collectively through trusts, the wealth is attributed to the family as a whole, while recognising the senior family member.

Total dividend payouts were derived using the regular dividends paid in the last fiscal year, plus the latest special dividends ended in July 2017. For the sake of consistency, we converted all non-US-denominated figures into US dollars based on the exchange rate as at December 30, 2016.

In some instances, individuals or families have been either combined with other family members or excluded from the list, after careful consideration of the nature of their holdings. This includes Kuok Khoon Hong, co-founder and chairman of Singaporean agriculture conglomerate Wilmar International, who is now included under his uncle Kuok Hock Nien “Robert”, and Ratan Tata, chairman emeritus of holding company Tata Sons, who we’ve left off because the majority of Tata Sons is controlled by philanthropic trusts endowed by the Tata family.

While our methodology misses out on Asian wealth derived from non-incoming earning or wholly private assets, as well as publicly listed companies that didn’t pay dividends in the past year, it offers a convenient way of measuring wealth that reflects families’ asset values.

Winners and losers

A number of individuals and families in the FinanceAsia Rich List received significant increases in dividend payouts this year, most prominently in the property, information technology, and energy sectors.

The Kwok family of Hong Kong’s Sun Hung Kai Properties jumped significantly on the Rich List, receiving $468 million in cash dividends, a 25% increase on the previous year as the property developer issued its highest dividend in the company’s history.

Yang Huiyan, the majority shareholder of China’s Country Garden, received $248 million in dividends, a bump up of 22.5% compared to the previous year. The Foshan-based property company stated a 24% jump in net profits last year, driven by a 35.4% increase in property development revenues, making Country Garden the third biggest Chinese developer in 2016 by sales.

The release of the iPhone 7 series in September 2016 boosted the dividends paid to AAC Technologies co-founder Pan Zhengmin and to Hon Hai Precision Industry’s chairman Gou Tai-Ming, better known as Terry Guo.

Pan took in $92 million in dividends, up nearly 50%, as his Chinese acoustics and haptics technology company reported a 30% increase in net profits. Taiwanese technology tycoon Gou paid himself $235 million in dividends, an increase of 33%, after Hon Hai Precision Industry recorded a record profit of $4.91 billion. The 2016 dividend issued by the electronics manufacturer, also known as Foxconn, was the highest in the company’s history.

In Southeast Asia the Chearavanont family, owners of Thai conglomerate Charoen Pokphand, collected nearly $255 million in dividends, up 35% from the previous year, largely driven by their stake in Ping An Insurance. The Chinese financial company saw big gains in its life insurance and Internet finance segments as net profits increased by 15.1%.

Mukesh Ambani, the richest man in India by net worth, received $226 million in dividend payouts this year, up nearly 15%, as energy conglomerate Reliance Industries improved profitability at its petrochemical and refining segments, with overall earnings up 18.8%.

Hong Kong’s Henry Cheng and family, who control Chow Tai Fook Jewellery Group and New World Development, were the year’s big losers, taking 28% less in dividends than the previous year – a difference of $328 million.

A weak year in retail two years ago prompted Chow Tai Fook to issue special dividends to return excess cash to shareholders, according to the company’s annual report.

Last November, the luxury retailer slowed its revenue decline by negotiating lower rents and cutting the number of its outlets in Hong Kong and Macau, resulting in lower special dividends and, consequently, a lower dividend payout for the Cheng family.

Meanwhile, falling oil prices impacted Hong Kong’s richest person by net worth, Li Ka-shing, as his dividend payout fell by more than $257 million year on year.

Calgary-based energy company Husky Energy, of which Li is the controlling shareholder, has not declared a dividend since July 2015 after the oil price declined precipitously in the second half of 2014.

Wipro chairman Azim Premji’s dividends fell by more than $124 million following a 4.7% year on year drop in the company’s annual net earnings. Among the largest Indian IT companies, Wipro has been especially slow to adjust to the post-2008 recession shift towards cloud services, mobility management, and big data, according to a report by Indian business publication Outlook Business.

Chinese property developer Hui Kayan, the 5th-richest person in Asia last year, dropped off this year’s list completely after his Hong Kong-listed China Evergrande decided against issuing a dividend this year.

Hui is in the process of reorganising Evergrande’s real estate unit, moving its property holdings into a Shenzhen-listed shell company to take advantage of the higher valuations on the Chinese stock exchange.