Rich List: Hong Kong, Macau tycoon territory

If Warren Buffet is the Oracle of Omaha, Li Kai-shing is the Sage of South China. And Li's dynasy extends well beyond the region; the tycoon recently acquired a telecom in the EU.
Li Ka-shing
Li Ka-shing

Hong Kong is renowned for the concentration of wealth among a tight group of powerful tycoons. Their business interests are wide-ranging, extending to the gaming and entertainment industries in Macau, but property development and investment are central to most of their fortunes.

Li Ka-shing (1) heads FinanceAsia's 2015 Rich List for a sixth consecutive year, earning dividends of more than $1.7 billion from his controlling stakes in Cheung Kong, Hutchison Whampoa, PCCW, Husky Energy, and other companies. He started his career making and distributing plastic flowers and later successfully challenged the commercial power of the British colonial conglomerates (known as “hongs”).

Now his activities range across property, utilities, ports, telecommunications, and retail. His companies produce steady cash flows and he tries to maintain prudent debt-to-equity ratios. In early 2015, Li announced a restructuring of his global empire, creating two new Hong Kong-listed companies: CK Property, to manage all his property businesses, and CKH Holdings, to take over all his other operations.

The simplified structure should help prepare for the 87-year old “Superman’s” succession.

Joseph Lau (2), who owns 75% of leading Hong Kong property developer China Estates, is second on the Rich List, collecting dividend income of $1.2 billion. He is also a fugitive from Macau justice, where he was sentenced to five years imprisonment in 2014 for bribery; fortunately for him, there is no extradition treaty between Macau and Hong Kong where he is based. He received – or paid himself – special dividends last year in order to purchase the La Scala luxury residential property at the heart of the corruption scandal, as well as a shopping mall from China Estates.


The troubles of the Kwok (6) brothers continued last year. In December Thomas, the former co-chairman of property developer Sun Hung Kai, was sentenced to five years in Stanley jail for corruption. Nevertheless, the company that built many of Hong Kong’s shorefront skyscrapers again paid healthy dividends to the brothers, including Raymond who was cleared of corruption charges and previously estranged eldest sibling Walter. Cheng Yu Tung (5) heads a vast Hong Kong group that includes Asia’s largest jeweller, Chow Tai Fook, which is conspicuously advertised on the territory’s buses, as well as leading property firm New World Development.

The jewellery business has now become the conglomerate’s biggest earner, while succession to the second and third generation of Chengs is well underway. A new entry to this year’s Rich List is Lui Che Woo (9), head of Galaxy Entertainment, who is rarely seen in public without his characteristic flat cap.

Last year gambling revenue in Macau fell 2.6% to $44 billion, according to government data, which was the first decline since public accounting began in 2002. China’s anti-graft campaign has taken
its toll on the sector and hurt gaming operators such as Galaxy. Lui responded by paying out and receiving a special dividend of $0.14 per share that was worth $393 million to him and his clan.


Examining dividend income to determine rich list

FinanceAsia analyses the publically listed assets of Asia (ex-Japan)’s leading business families and aggregates the dividends paid to them through their shareholdings or to their trusts or charitable foundations.

This methodology provides a more dynamic picture of wealth in the region than can be achieved by estimates of net worth, but clearly underestimates the fortunes of individuals and families whose wealth is mainly derived from non-income earning or wholly private assets. We identify a large universe of companies with large or controlling shareholders and gather information on ownership stakes and dividend payouts based on statements made to stock exchanges, newswires and, in the first instance, declarations made in annual reports.

Some holdings are opaque because ofcomplex cross-shareholding structures such as the Lee family’s control of
Samsung and the Keswick’s control of Jardine Matheson, so there are inevitable instances of under-reporting of some tycoon’s wealth.

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