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HURUN REPORT’S ANNUAL RICH LIST SHOWS 7 NEW FACES AMONGST TOP 10 RICHEST CHINESE

(13 October 2009, Beijing) Hurun Research released the Hainan Clearwater Bay 2009 Hurun Rich List, a ranking of the 1000 richest individuals in China, sponsored by Hainan Clearwater Bay, a luxury property developed by Agile Property on Hainan Island.


The main highlights of the Rich List Findings are:
· 7 NEW FACES IN TOP 10: BIGGEST SHAKE-UP OF THE TOP 10 SINCE HURUN REPORT STARTED RANKINGS IN 1999
· 130 USD BILLIONAIRES DESPITE CREDIT CRUNCH. 5 YEARS AGO ONLY 3
· SHANGHAI & BEIJING PREFERRED CITIES OF RESIDENCE, WITH 90 & 87 OF THE HURUN 1000 LIVING THERE
· HUANG GUANGYU STILL IN TOP 20 DESPITE LAST YEAR’S ARREST
· 94 INDIVIDUALS UNDER 40 YEARS, LED BY 36-YR-OLD BILLIONAIRES CHEN TIANQIAO, FANG WEI OF LIAONING FANGDA AND XIAN YANG OF HIDILI INDUSTRY
· WARREN BUFFETT MIDAS TOUCH HELPS POWER WANG CHUANFU TO RICHEST MAN IN CHINA

43-year old Wang Chuanfu of BYD is the richest man in China with wealth of US$5.1 billion, followed by Paper Queen Zhang Yin.

“Wang Chuanfu has made it to Number One in China on the combination of a 30% growth of the Chinese car industry and the Warren Buffett Midas touch,” says Rupert Hoogewerf, founder and compiler of the Hurun Rich List. “These past 12 months have also been a rollercoaster year for Zhang Yin, whose net worth dipped as far down as US$350 million before rising back to second spot with US$4.9 billion today.”

The arrest of last year’s richest man and hostile government takeover of last year’s second richest man, meant there were seven new faces in the 2009 Top Ten. This represents the biggest shake-up of the Top Ten since Hurun Report started the rankings in 1999.

China’s super rich seem to have put the credit crunch behind them. Rebounding capital markets and property prices pushed the collective net worth of The Hurun 1000, our annual tally of China’s richest people, up US$130 billion in the past 12 months from US$439 billion to US$571 billion.


Leading the way: Wang Chuanfu
43-year old Wang Chuanfu saw his rankings shoot up 102 places to take top spot on the 2009 Hurun Rich List with wealth of US$ 5.1 billion. Wang’s 27.8% of HK-listed BYD hit the big-time shortly after Warren Buffett announced he would buy 10% of the company one year ago. BYD is highly regarded for its technology and innovation, and is assuming a leadership position for the next generation of ‘green cars’.

Founded in 1995, BYD made its name initially with rechargeable batteries for mobile phones, a sector in which Wang first took on then beat his Japanese competitors with his innovative and flexible manufacturing, before moving into cars in 2003. BYD became the first manufacturer in China to sell a plug-in electric hybrid car.

Zhang Yin ‘Recycled Paper Queen’
52-year old Zhang Yin, a former Number One of the Hurun Rich List, has had a rollercoaster past 12 months, with her stock hitting an all-time low of HK$0.72 in October last year before rebounding to HK$12 this September. With most of its packaging products targeted at China’s exporters, Zhang’s fortunes are closely tied to the expectations surrounding the export industry. Nine Dragons Paper imports recycled paper and processes it into packaging and paper materials.

The ‘Paper Queen’ owns 72.25% of HK-listed Nine Dragons Paper together with husband Liu Mingzhong and brother Zhang Chengfei.


Top Ten of 2009 Hurun Rich List

* New to Top Ten

More New Faces in Top Ten
Husband and wife team Huang Wei and Li Ping shot up 23 places to fifth place through their 71% of Shanghai-listed property developer Xinhu Zhongbao, which saw its share price rise 265% to RMB 12.5 up from RMB 4.7 twelve months ago. A former teacher, Huang’s first break came in the early nineties selling eyewear in Hangzhou before becoming involved in the fledgling stock and commodity markets. Neither Huang nor Li have any official positions in their main group and subsidiaries, an unusual feature for Chinese private businesses, and are extremely low-key.

Lu Zhiqiang, ranked 5 with US$4.4 billion, made headlines in September after he announced a 29% stake in top Chinese brand and computer maker Lenovo for US$404 million. 57-year-old Lu made his fortune from property development and financial services investments, led by personal holdings in Minsheng Bank and Haitong Securities.
　

Wang Jianlin, ranked 9 with US$4.2 billion, is lining up for a public listing of Wanda, China’s leading commercial property developer. Should the IPO go successfully, there is a good chance Wang could be a future Number One.

Yan Bin, ranked 10 with US$4.1 billion, also known by his Thai name of Chanchai Ruayrungruang, shot up 47 places after a revaluation of his assets. Yan’s prime money spinner is the China franchise for energy drink Red Bull, although he is best known in Beijing for his Pine Valley golf resort. 55-year-old Yan Bin made his first break in Thailand with property management, travel and trade, before returning to China in 1995.

Liu Zhongtian, also ranked 10 with US$4.1 billion, made headlines in May for the world’s largest IPO of the year, when Zhongwang raised US$1.3 billion from the public. Zhongwang makes aluminum products for the transportation, machinery equipment and infrastructure sectors.


Hurt badly – Out of Top Ten
Huang Guangyu, last year’s richest man, still managed 17th spot despite his arrest last December for unspecified business crimes. 40-year-old Huang is worth US$3.4 billion based on his 34% share of listed electronics retailer Gome and his privately-held Beijing property assets. His Suning archrival Zhang Jindong has risen above Huang for the first time with wealth of US$4.1 billion.

Du Shuanghua, last year’s second richest man, was another big loser. These past 12 months, the 44–year-old steel tycoon has been fighting a bitter battle to avoid losing control of Rizhao Steel. Media reports that Shandong Steel, a newly formed group controlled by the provincial government of Shandong, will inject US$2.3 billion in exchange for a two-thirds stake of Rizhao Steel, has meant that Du’s stake in Rizhao Steel together with his other assets are now only worth US$2.3 billion dropping him down to 41st place.

Red capitalist Larry Rong Zhijian is probably the biggest victim of the credit crunch. Rong, now ranked 37 with US$2.4 billion, had to fall on his sword and resign as chairman of Citic Pacific in April, after a currency bet that went wrong. Parent company Citic had to shore up the capital of Citic Pacific with US$1.5 billion.

Greentech tycoons Peng Xiaofeng, 33 years, and Shi Zhengrong, 45 years, both dropped out of the Top Ten. Peng’s LDK Solar shed 75% of its value and Shi’s Suntech more than half its value, with the result that Peng lost US$3.2 billion from his personal balance sheet and is now worth US$800 million, dropping down to 155th from 4th place last year, with Shi down to US$1.5 billion at 59th place.

Zhang Zhixiang dropped 21 places, despite only loosing US$250 million over the year, due to lower valuations of the steel sector after the Du Shuanghua affair. In July Zhang, 42 years, pulled out of a proposed merger with a smaller state-owned steel mill, following the death of an employee sent in to restructure it.

Table: Where are they now? Analysis of Top Ten of 2008 Hurun Rich List
　

…And the Rest of the Top Ten
Property tycoon Xu Rongmao maintains a Top Ten position for the ninth year running, the longest running Top Ten record since the list began in 1999. Former Number One, 26-year-old Yang Huiyan of Country Gardens is in fourth.

Zhu Mengyi of Hopson Development lies in fifth place. Property tycoon Zhu has not been seen in public over the past half year, and is currently rumoured to be under government detention, implicated in the Huang Guangyu scandal. Zhu and Huang both come from Shantou, the same hometown as Asia’s richest man Li Ka-shing.

Pig Feed King Liu Yongxing, the winner of the Hurun Most Respected Entrepreneur of the Decade in October 2008, maintains his fifth place. Liu has diversified to alumina production.


KEY TRENDS
1. 130 US Dollar billionaires and growing fast
Despite the greatest wealth destruction in the West in the past seventy years, China’s rich are getting richer and putting the credit crunch firmly behind them. The average wealth of the Hurun 1000 grew 30% to US$571 million, surpassing the China boom of 2007. The price of admission grew US$50 million, from US$100 million last year to US$150 million this year. Despite this hike, 180 new members made the cut-off.

The number of known US Dollar billionaires in China has grown to 130, up from 101 last year and none in 2003. “You can double the real number of billionaires in China to 260,” says Rupert Hoogewerf, founder and compiler of the Hurun Rich List. “There are still a large number of billionaires off the radar screens, managing to build up substantial wealth away from the public spotlight from property, the stock market and investments.”

“China’s wealth is growing at breakneck speed,” says Rupert Hoogewerf. “Since our 2004 list, we have seen a ten-fold increase in the number of individuals with personal wealth of at least US$150 million. In 2004, we could only find 100 individuals with US$150 million, whereas this year, we managed to find 1000 individuals with US$150 million.”

China is now second only to the US in terms of known USD billionaires.


2. Warren Buffett’s China influence
Apart from his influence on the rising fortunes of BYD shareholders Wang Chuanfu and Lv Xiangyang, Buffett caused an immediate rise in the wealth of Li Guilian, ranked 656, after announcing at his annual conference that he only wore suits made by Dayang Trands.

Duan Yongping, ranked 340 with wealth of US$440 million, has twice won the charity auction to have lunch with Buffett. In 2006, Duan paid US$621,000, and in 2008 US$2.1 million, although the second lunch was in conjunction with investor Zhao Danyang.


3. Buying up top brands
China’s private sector is becoming increasingly interested in acquiring brands.

Chen Fashu, ranked 15, surprised the market first in June with a 7% purchase of Tsingtao Beer from Anheuser-Busch for US$234 million, and followed in September with a 12% of traditional Chinese medicine maker Yunnan Baiyao for US$320 million.

Lu Zhiqiang, ranked 5, purchased 29% of Lenovo for US$404 million.

Suolang Duoji, ranked 295, of Sichuan Tengzhong, is in talks with GM to purchase the Hummer brand. Li Shufu, ranked 123, of Geely is in talks with Ford to buy the Volvo brand.

Zheng Yonggang, ranked 295, successfully sold a 28% stake in apparel brand Shanshan for US$110 million to Japanese textile retailer Itochu.

Coca Cola failed in its negotiations with Zhu Xinli, ranked 321, to purchase the Huiyuan fruit juice brand, and Danone finally admitted defeat in its ongoing battle with Zong Qinghou, ranked 13, of Wahaha, agreeing to sell the 51% of their joint venture for a reported Euro 300 million.


4. Summary of key facts
Most of China’s wealth creation has been driven by its massive urbanization programme, led by property and related industries. The urban population is expected to increase by 300 million people by 2025, according to the Ministry of Construction, laying the foundations for continued growth.

Surprisingly few on The Hurun 1000 are reliant on exports to the Western economies. Mining is the fastest-growing industry.

Less than 1% of The Hurun 1000 inherited their wealth. This compares with 25% in the UK, who inherited their wealth, according to the UK Sunday Times Rich List 1000, and 35% in the US Rich List.

102 women made the list led by Zhang Yin and Chen Lihua, representing 10.2% of the total. Chinese women now make up over half the world’s richest self-made women.

Shanghai and Beijing top The Hurun 1000’s preferred cities of residence with 90 and 87 individuals respectively. Shenzhen follows with 65 individuals, Hangzhou 60, Guangzhou 38, Wenzhou 25, Chengdu 23, Hong Kong 22, Nanjing 21 and Dongguan 20.

Hong Kong is the preferred stock exchange for China’s largest private companies. Surprisingly, none of The Hurun 1000 have listed on the Tokyo stock exchange, the second largest stock exchange in the world after New York by aggregate market capitalization of its listed companies.

Parents looking to improve the chances of their children making The Hurun 1000 should look out for the year of the Rabbit and avoid the year of the Boar, being the star signs with the most and least entrepreneurs from The Hurun 1000 respectively.


5. Profile of the average ‘Rich Lister’
The profile of the average ‘Rich Lister’ is a 50-year old self-made man, born in Zhejiang, who started out sixteen years ago aged 34, and today has made his money from property development. He is fifteen years younger than his US or European counterpart, and growing faster.

There are 94 individuals under the age of 40 that make the cut.

China has 825,000 individuals with personal wealth of more than 10 million yuan (Euro 1 million or USD 1.5 million) and 51,000 individuals with more than 100 million yuan, according to the Hurun 2009 Wealth Report, released in May 2009.

Beijing, Guangdong and Shanghai are home to the lion’s share of the rich, accounting for 48% of millionaires in Mainland China. Beijing tops the list with 143,000 individuals with more than 10 million yuan and 8,800 individuals with more than 100 million yuan. For the breakdown by region, see http://www.hurun.net/listreleaseen344.aspx.

The average Chinese with personal wealth of 10 million yuan was born in 1970 and is 39 years old today.

The average Chinese with personal wealth of 100 million yuan was born in 1966 and is 43 years old today.

The top three hobbies of China’s wealthy are travel, swimming and golf, according to the Hurun 2009 Best of the Best Survey. Internationally, their preferred travel destinations are the US, Australia and France, whilst domestically they are Yunnan, Sanya and Hong Kong. They are spending 50% more time on leisure travel, whilst a third now take more than twenty days holiday a year. At the same time, they are also substantially busier, spending 20% more time on the road for business compared with a year ago.

6. Other interesting points
Political connections: 15% of The Hurun 1000 are either a delegate to the National People’s Congress (NPC) or the China People’s Political Consultative Congress (CPPCC), a significant government endorsement of the individuals and their businesses. The big increase came at the 17th Party Congress held in October 2007, when many of the entrepreneurs won their new position. There are also twelve deputy chairmen of the All-China Federation of Industry & Commerce (ACFIC) on The Hurun 1000.

Blipping onto the radar screen. Pony Ma Huateng, ranked 16, has overseen the growth of HK-listed Tencent to US$29 billion, making his 11.59% of the company together with some cash out worth US$3.6 billion. The ten largest companies by market cap controlled by people on The Hurun 1000 are 1. Ping'An US$57 billion, 2. Tencent US$29 billion, 3. Zijin Mining US$21 billion, 4. Minsheng Bank US$20 billion, 5. BYD US$18 billion, 6. Alibaba US$17 billion, 7. Huawei US$15 billion, 8. Baidu US$14 billion, 9. Everbright Securities US$12 billion and 10. Suning US$11 billion.

Title sponsor of Hurun Rich List. Hainan Clearwater Bay, the title sponsor of The Hurun Rich List, is developed by HK-listed Agile Property. Agile is 59.43% owned by Chen Zhuolin & family, ranked 22, giving them US$3.1 billion.

Yao Ming drops off list. The most prominent drop-off this year is NBA basketball player Yao Ming, whose injury denied him the chance to keep up with the rise in the cut-off of the list to US$150 million. Last year, we valued Yao’s fortune at US$100 million.



In Jail or whereabouts unknown. Two people are in jail: Wu-Mart founder Zhang Wenzhong, who was sentenced in October 2008 to 18 years for fraud, bribery, embezzlement, and last year’s richest man in China, Huang Guangyu, who is currently awaiting sentence.

Zhu Mengyi, the low-key founder of HK-listed Hopson Development, has not been seen in the past half year and is rumoured to have been arrested in the same sweep as Huang Guangyu.

One has been freed: In July Skyworth founder Huang Hongsheng was released from jail after four years for embezzlement.

One disappeared and one bankrupt: Rong Hai, a long-term Rich Lister disappeared this year, leaving debts behind him, and has subsequently been dropped from the list. Lan Shili, ranked 211 last year, has seen his company go into liquidation.

Divorced and off the list. Cai Dabiao of J-Kungfu has also missed the cut this year, following his public divorce, which culminated with the splitting of the couple’s assets. Last year, Cai was ranked 821 with wealth of US$130 million.

Former government officials. Ye Chenghai, ranked 131, is the former deputy mayor of Shenzhen City in Guangdong Province. Ye Shiqu, ranked 793, is the former deputy mayor of Chuzhou City in Anhui Province.

China now has its own Bono, in the form of former film star ‘Jet‘ Li Lianjie, ranked 598, who has grown the Jet Li One Foundation into one of China’s highest profile charities.

Big listings. Liu Zhongtian, ranked 10, led Zhongwang to raise US$1.3 billion in May, making it the largest IPO in the world for the year. Other key IPOs during the year include Zhu Gongshan of Baoli, Leng Youbin of American Dairy, Xu Jingnan of sportswear retailer Fujian Peak Group, Li Xinghao of Chigo Air Conditioners.

China has many listings in the pipeline for the next twelve months, including Xu Jiayin of Evergrande, Xu Jiankang of Powerlong, Su Meng of Gold Tak Land, Li Hua & Li Xiaoping of Excellence, Huang Chaoyang of Zhongjun.

Spin-off IPOs. Timothy Chen Tianqiao, ranked 34, of Shanda Interactive, spun off a subsidiary on Nasdaq in September, raising a staggering US$1 billion in the process. Charles Zhang Chaoyang, ranked 176, of Sohu, spun off gaming subsidiary Changyou in April, raising US$138 million.

Company that created the most individuals on the list: Zijin Mining – 9 individuals led by Chen Fashu.


7. Methodology
The Hurun 1000 is a snapshot of wealth on 15 September 2009. The exchange rate used for US$ was RMB 6.8. The list relates to Mainland Chinese only, defined as someone born and brought up in Mainland China, no matter what passport they might hold today.

Valuing the wealth of China’s richest is as much an art as it is a science. Sure, we have missed some people, but we believe the Hurun Rich List is the most serious attempt to identify China’s top entrepreneurs and to measure their holdings. Our team of researchers has - for the eleventh year running - traveled the length and breadth of the country cross-checking information with entrepreneurs, industry experts, journalists, bankers, and regulators, as well as previous years’ databases. For non-listed companies, we valued by comparing them with their listed equivalents using prevailing industry Price/Earning ratios.

Whilst significantly all of Wang Chuanfu’s stock is made up of H-shares that cannot be freely sold or traded, for valuation purposes, we have – in line with investment banking standards – valued this type of restricted shares on a par with fully tradable shares.


For more information on the

2009 Rich List Appendix

Hurun Rich List