New | The secret to Hong Kong tycoons’ success in one word: diversify

Hong Kong’s wealthiest are not what they used to be. Where and how fortunes were made very much charted how quickly they grew their billions in the two decades since Hong Kong returned to Chinese power in 1997.

Just as the property business was the mainstay to their rise and success in the 1980s and 1990s, diversification into other industries and geographies became the key to their wealth.

No other tycoon exemplifies the change as well as Li Ka-shing, Hong Kong’s richest man. Li’s estimated net worth tripled to US$30.3 billion this year from US$11 billion in 1997.

The Li family’s flagship, CK Hutchison Holdings, owns businesses ranging from telecommunications networks to container ports, power plants and retail stores all over the world. It earned 59 per cent of its HK$62 billion (US$7.96 billion) in pre-tax profits from core operations in Europe, 15 per cent from Hong Kong and mainland China, 5 per cent from Canada and 19 per cent from the rest of the world.

“Li’s outshining with the rest of the pack has a lot to do with his empire’s diversification outside the property sector and its overseas expansion strategy,” Jun Yang Securities chief executive Kenny Tang Sing-hing said. “It leveraged a lot from its acquisition of Hutchison Whampoa, whose British and international management talent were key to its later success in overseas expansion.”

Between 1979 and 1980, Li bought more than 40 per cent of the then debt-laden Hutchison Whampoa, one of the leading trading companies that traces its history to a dockyard in 1863.