The name Zhong Shanshan rarely rings a bell in mainland China, let alone in the world. But when Jack Ma is mentioned, almost everyone knows the billionaire who founded Alibaba. Others like Tencent founder Pony Ma is also a recognizable name. But as of Wednesday, Jack Ma was no longer the wealthiest man in China. The throne belongs to Zhong Shanshan.
Unlike Jack Ma and Pony Ma, Zhong is not a tech entrepreneur. Instead, the low-profile Zhong Shanshan becomes China’s new richest man by selling something very ordinary – bottled water. His nickname “Lone Wolf” speaks volumes about how low-profile he is, a man who dropped out of elementary school at the age of 12 during China’s chaotic Cultural Revolution.
Zhong Shanshan, the founder of the popular Chinese bottled water brand Nongfu Spring, has an estimated net worth of US$58.7 billion on Wednesday (Sept 23), surpassing Jack Ma’s US$56.7 billion. It was only 2 weeks ago when he became China’s third richest man after his company, Nongfu Spring, went public in Hong Kong with a bang – skyrocketing 85% on its first day of trading.
Nongfu Spring – which means “farmers’ spring water” – raised US$1.1 billion in its initial public offering (IPO) on September 8. His stake of 84.4% in the bottled water giant, which was established in 1996, saw his net worth valued at US$40 billion. But he also owned a vaccine maker company – Beijing Wantai Biological Pharmacy – which went public in Shanghai in April 2020.
Pharma giant Wantai is up more than 2,000% since its public offering on the Shanghai Stock Exchange in April. Both companies pushed the Hangzhou-born Zhong’s wealth to about US$50 billion earlier this month, up from just US$20 billion last month. In fact, he is one of the few people in China who builds not one US$10 billion business, but two US$10 billion businesses.
Not bad for a man who used to work as a construction worker, a news reporter and a beverage salesman before he started his own company selling mushrooms and pills made from turtles. His pharmaceutical firm is working with researchers at Xiamen University and Hong Kong University to develop nasal spray vaccine for Covid-19, which has been granted approval for phase-I human testing.
It is the first nasal spray Coronavirus vaccine approved by the China’s National Medical Products Administration for clinical trial in humans. The nasal spray joins about 35 other competitors currently in human testing, as the global race to be first with an effective vaccine against the deadly virus intensifies (usage of nasal vaccine can significantly reduce lung damage).
If the experiment of using the nasal spray to combat Covid-19 works, the share price of Wantai Biological Pharmacy will hit the roof and so will billionaire Zhong’s net wealth through his 75% stake in the pharmaceutical company. Still, his business of selling bottled water will continue to be his main source of wealth largely because the country’s tap water is generally considered unsafe for drinking.
Even until today, foreign visitors and expats are strongly advised to buy bottled water from a local convenience store. Mr. Zhong strikes gold bottling and selling water from a nearby reservoir in the eastern Chinese city of Hangzhou. Since 1996, he has built Nongfu Spring into China’s leading bottled water distributor, tapping water and building factories around the nation.
In 1997, a year after he started his business, China consumed 2.8 billion liters of bottled water. By 2013, the consumption rose to 39.5 billion liters – 14 times. As recent as 2016, China’s Ministry of Water Resources admitted that more than 80% of the country’s groundwater are unsafe for drinking due to pollution. By 2018, Zhong controlled 26.4% of China’s US$30 billion bottled water business.
It’s a goldmine – for every bottle of water Nongfu sells, the company makes 60% profit. His nearest competitor, China Resources Beverage, controlled 20.9% of the highly profitable market. Despite his low-profile, Zhong is not only a savvy businessman, but also a clever marketing guy whose slogan – “Nongfu tastes a bit sweet” – is a mantra throughout China.
Naturally, Nongfu broke the record when the company became the most over-subscribed stock in the history of Hong Kong Stock Exchange. It offered only 388.2 million shares at HK$21.50 a pop, but it was overbought by a whopping 1,147 times, an order worth US$87 billion. Nongfu’s IPO broke the 2008 record set by China Railway Construction Corporation, when the stock was oversubscribed by 26 times.
Interestingly, unlike most of mainland businessmen, the 65-year-old media-shy billionaire does not involved in politics and his business interests are not linked to other rich families or tycoons. The listing of Nongfu Spring transformed 68 of the company’s shareholders – including 33 long-time employees – to instant multi-millionaires, whose stakes range from 0.0063% to 1.4%.
Besides its famous “red-capped” bottled water, Nongfu has also become a major producer of soft drinks. About 40% of its 2019 revenue was derived from products including teas, flavoured vitamin drinks and juices. But billionaire Zhong may not be able to stay on the top of the chart for long. Billionaire Jack Ma, who has held the top spot for the past 6 years, will most likely get back his title.
Alibaba-backed Ant Group is due to list on Chinese and Hong Kong stock exchanges next month. If the online payments company achieves its estimated market valuation of US$250 billion, Jack Ma will be richer by US$28 billion. Still, Zhong Shanshan can be proud of being the only tycoon among China’s five richest people who isn’t from the tech or real estate industry.
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September 25th, 2020 by financetwitter
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Malaysia’s Proton, inventor of the origami coffin on four cheap tyres was decades ahead of the whole Chinese car industry.
Proton, until à Chinese took it over and turned it into a huge success, was a perpetual loss-maker and a parasite of the worst order on our nation’s coffer.
It was a former Chinese village fridge repairman turned automaker could buy over Proton. And before Proton, he ate up Volvo, an auto manufacturer of great standing that Proton under Malaysian stewardship could never become in a billion years.
We tried steel production too. Among many other great ideas in industry which our monkeys couldn’t manage. Even the Proton dealers of the past couldn’t manage or survive without easy gomen fund pumped up their assh*les.
Here, we read of another of these Chinese wonders (there are many) who became world success stories.
Why can’t Malaysia produce such folks?
Worst than that, we seem to produce worthless moron parasite bloodsuckers forever dependent on shameless cronyism, on handouts.
We seem to be utterly useless and lazy at anything, we probably will never survive if we can’t depend on the Indons, Banglas, etc without whom we couldn’t survive a day sitting under the coconut trees and doing absolutely nothing.
How is it that all others, especially the Chinese, can do everything and more but we as supremacists of the highest order and all, can only do fcuk all – and do that badly?
Don’t think too hard about answers, that would injure any Malaysian head !