LI, Tao @ Hong Kong

Katherine Yip-Geicke speaks in a business class at the University of Hong Kong. Provided to China Daily

If you are a frequent traveler but have never made any friends during your journeys, you may have let some good opportunities slip by unnoticed. On a flight home to Hong Kong in 1984, a girl in her early twenties met Chris Hornung, the founder of Pacific Cycle, an outdoor recreation products company, who was on a business trip to Hong Kong. She introduced herself and volunteered to help him with business contacts in Hong Kong, and Hornung agreed.

Two years later, in 1986, on the journey from Bangkok airport into the city, a giant Disney billboard piqued the girl’s curiosity. After “talking to all strata of people” but still failing to get a meeting with Adam Lisowski, the biggest licensee of Disney clothing at the time, she decided to walk in by herself and corner Lisowski at the office gate to express her interest. She made it again.

“Opportunities are infinite,” she believes. “When you are young, you have everything to gain, but very little to lose.”

Katherine Yip-Geicke, while still in her 20s, went on to become a licensee for Disney apparel with her own company AMW Hong Kong Limited; and Hornung, who became and remains a close friend of hers, helped Yip-Geicke with her first leveraged buy-out of a mainland company years later.

She has also founded or partnered with 8 companies across several sectors all over the world. A guest lecturer at the University of Hong Kong, Yip-Geicke now conducts a course named “Entrepreneurship, Creativity and Innovation”, to inspire her MBA students with her stories. Accustomed to a low-profile life, Yip told China Daily that ours was her first interview with the news media.

Born into a Chinese family and emigrating to the US when she was only three months old, Yip-Geicke said she was spoiled the way many Chinese children are. However, after falling in love with a boy and not getting approval from her father, who threatened to cut off her financial support, Yip-Geicke said she decided to stand on her own feet and achieve something to prove her strength and capability.

“There is no quick step or magic toward success, and it is never easy for a starter,” said Yip-Geicke. “I advise people to identify their passion and innate ability, for starters. But if they cannot get their most preferred job, just take any one – whatever it is and make the most of it.”

After graduating from Harvard University with a major in business administration and marketing, Yip-Geicke worked at her first job, in the steel industry, which she described as totally male-oriented and “a very tough one”.

“I didn’t have anything to offer at that time, except my good attitude, so I had to work hard,” she said.

Yip-Geicke believes that her family values, the Chinese philosophy of humility, diligence and self-reflection, influenced her over the years, and that these have been key ingredients in her otherwise secret recipe for her success.

“In college, I was working part-time as a dishwasher in a restaurant where the boss paid us at 5 pm. Some of the other helpers never put in any overtime, while I would not leave until 6 pm. One day the boss said he needed someone diligent and reliable to do the cashier’s job, and he asked whether I was interested,” she recalled.

“I think the most important thing for a employee is not to look at what you can get first, but think about how you can do the best. Little stuff sometimes will reward you a lot,” said Yip-Geicke.

Yip-Geicke said she has experienced ups and downs over the past two decades, and has at times been cheated by her business partners and lost some money. However, she always stuck to the theory “believing in both sides – like a marriage” when doing business, because she values integrity and deems it another key to success, in combination with some good breaks and luck.

“I have a very trustworthy chief financial officer, very trustworthy operational staff, lawyer, financial analyst and banker, who, with me, come together to discuss any problems we encounter in the business. The trust among us, however, was not won over night,” said Yip-Geicke.

The eight companies she has established or partnered with span several sectors, including toys, entertainment, investment and technology. Her passion for digital media has seen her invest or partner with a number of new media companies since early 2000, including Outblaze, a Hong Kong-based business in the field of multilingual communication services for online communities, and Typhoon Games, a publishing company that develops and distributes PC and online games via mobile services.

Noting the high-tech trends, Yip-Geicke observed that the “Business model has migrated to advanced technologies, and business engraved with technology is more efficient, approachable and dynamic. There is no doubt that the Internet is the future, and I am working on it.”

Besides Touchmedia, a mainland-based digital advertising company focused on the in-taxi market, Yip-Geicke has been thinking about launching an international brand in China, as there is a wonderful pool of talent and because no one wants to miss the Chinese market.

Despite her evident and triumphant internationalization, she remains at heart very Chinese. “My business will always be global, but with roots that have Chinese elements, because I am Chinese,” said Yip-Geicke.

China Daily

(HK Edition 04/29/2010 page3)

www.chinadaily.com.cn/hkedition/2010-04/29/content_9788478.htm

Swire Properties Ltd, having kicked off the roadshow Monday for its Hong Kong IPO, may have difficulties in drumming up support from investors for its shares, as it is expected to price its shares at a relatively high level amid gloomy market sentiment, some analysts believe.

Blue-chip conglomerate Swire Pacific Ltd, parent of Swire Properties, said Sunday that it has set an indicative price range for the IPO of Swire Properties at HK$20.75 to HK$22.90 per share, translating into an 8.3 percent to 16 percent discount to the estimated net asset value of the property unit at the end of 2010.

“Even though the indicative price range set by Swire Properties is still within reasonable levels, compared with its listed peers, the company may have set the price range a bit too high.” said Eric Yuen, head of research from Daoheng Securities.

Yuen said a higher discount to the company’s net asset value would make the stock more attractive, as the lower price is more approachable to the investors.

“Most property plays are trading at about a 20 percent discount to their net asset value currently, bigger than the discount offered by Swire Properties. Another local property company, Wharf, which generates most of its profit by leasing offices as Swire does, is also trading at a bigger discount,” said Yuen.

Swire Properties didn’t disclose the number of shares to be sold. People familiar with the matter said the company plans to sell 910 million new shares, or 13.8 percent of its enlarged share capital, seeking to raise as much as HK$20.8 billion. The offering has an overallotment option of an extra 136.5 million existing shares

“The timing is also bad. The property sector in the Hang Seng Index has slid all the way down, as Hong Kong developers are haunted by a series of government measures customized for them in the past few weeks,” said Yuen.

Financial Secretary John Tsang recently announced measures to curb possible price manipulations by developers in new project launches, including requiring developers to disclose transactions involving board members within five days of the transaction, to release a price list three days ahead of launching a project and to put up more flats for sale in the initial launch of a project.

Marco Mak, analyst with Taifook Securities Group, however, believes the core holding should be attractive to institutional investors, as there have been very few IPOs by local developers in recent years.

“Once listed, Swire Properties will immediately become the third- largest property company in the local bourse. As its major income, office rents are stably rewarding, and outlook for the local property giant is still promising this year,” Mak told China Daily.

Swire Properties develops and manages commercial, retail, hotel and residential properties. It is the biggest commercial landlord in eastern Hong Kong Island. Its buildings include TaiKoo Place and several house companies, which also own Pacific Place shopping and office complex in Admiralty.

Reports have said that Swire Properties’ IPO, to be priced on May 7 with trading debut set at a week after, will be the largest in Hong Kong since the November 2007 share sale of China Railway Group Ltd.

China Daily

(HK Edition 04/27/2010 page2)

www.chinadaily.com.cn/hkedition/2010-04/27/content_9777347.htm

Stronger yuan could burden the poor with higher food prices: Tsang

Financial Secretary John Tsang said any sudden increase in the value of the yuan would risk hurting Hong Kong’s exports and triggering inflation, which would undermine the living standards of residents, particularly the low-income group in the city.

“Drastic appreciation of the yuan may undermine competitiveness of our exports and push up inflation. Some companies in Hong Kong have been subjected to greater cost pressure since mid-2005, during which time the yuan has appreciated by over 20 percent against the US dollar in an orderly manner,” Tsang told lawmakers at the Legislative Council Wednesday.

Tsang said although the city’s economy as a whole has adjusted rather well to these changes over the years, he nevertheless worries that the rise in food prices resulting from climate changes and exchange-rate movements may lead to a rise in inflation later this year.

Tsang expressed deep concern about the impact of inflation and, specifically, rising food prices on low-income people. But he pointed out that the government has already announced a series of relief measures, such as waivers of public housing rent and additional social security allowance payments to protect people’s livelihoods, adding that the government will closely monitor the impact of inflation.

Mo Pak-hung, associate professor of economics at Hong Kong Baptist University, said as Hong Kong has separately pegged its dollar to the American currency since 1983, the yuan’s appreciation would weaken the Hong Kong dollar’s purchasing power vis-a-vis goods imported from the mainland.

“To low-income residents in Hong Kong, a stronger yuan will make their living even harder, since the city is importing a great deal of daily necessities from the mainland,” said Mo.

Mo said that, in theory, the yuan’s strengthening will also affect mainland exports via Hong Kong to overseas markets, as the rising prices of goods would potentially curb demand abroad.

However, he added, “as the global economy is revitalizing and demands from Europe and the US are expected to further pick up, I think a gradual appreciation of the yuan in the year would not harm the city’s exports substantially.”

Secretary Tsang believes China will “take forward reforms” in the yuan’s course in light of the evolving global economic situation and the development of the mainland’s domestic economy, in a progressive manner so as to avoid undue fluctuations.

“The strengthening of the yuan will boost consumption in the city, particularly the mainland visitors’ spending here in Hong Kong,” said the Financial Secretary.

HSBC earlier this year predicted the pace of the yuan’s appreciation will in all likelihood be much slower than in previous years, about a 3 to 4 percent increase on an annualized basis in 2010.

China Daily

(HK Edition 04/22/2010 page1)

http://www.chinadaily.com.cn/hkedition/2010-04/22/content_9759446.htm

New mainland property sale rules, Goldman Sachs woes cited as factors

Hong Kong stocks took another hit, suffering their biggest single-day loss in percentage terms in two months, led by mainland property developers and banks after the central government announced further measures to curb speculative demand for real estate, and after US regulators accused Goldman Sachs of fraud.

The benchmark Hang Seng Index closed the day down 460.09 points, or 2.1 percent, its sharpest drop since February 19, to the verge of a three-week low, closing at 21,405.1 points, after plunging over 500 points at one point in intraday trading.

The China Enterprises Index of top locally listed mainland stocks fell 2.42 percent to 12, 253.78, the lowest in three weeks.

Banking stocks were hit by news of a US investigation into Goldman Sachs. HSBC Holdings Plc slid 3.2 percent to HK$81.85, while Standard Chartered declined 3.8 percent to HK$210.40.

The US Securities and Exchange Commission Friday said the investment bank defrauded investors by failing to disclose key information about mortgage investments it sold in 2008 when the US housing market was collapsing. The bank now also faces a regulatory probe in Britain and scrutiny from the German government.

Thomas Ng, investment strategist at Quam Securities Co Ltd said news about investigations into Goldman Sachs may cause a major correction in banking and financial stocks, but he believes that the correction won’t last long, perhaps until early May.

“The credibility of financial institutions was undermined after the onset of the financial crisis, whereas Goldman’s possible fraud should not be a big surprise to the market. But the news came out when investors believe the market is ready for a correction after two consecutive months of gains, so Goldman Sachs provides them a perfect excuse to sell off,” said Ng.

“Since conditions and prospects for the financial industry are now in doubt, sentiment for HSBC and Standard Chartered will be affected for a while, but it won’t be long, as neither of the two banks was involved in the deals Goldman was accused of,” Ng added.

Mainland developers underperformed as well after the State Council announced new measures over the weekend to curb speculative demand for real estate.

Banks in the mainland are being asked to stop loans for third-home purchases in cities with excessive property price gains and to suspend lending to buyers who are not able to provide tax returns or proof of social security contributions in that city. Reports also cited unidentified sources saying the mainland may soon introduce, on a trial basis, a new tax on property transactions.

China Resources Land declined 5.5 percent to HK$14.42, while Sino-Ocean China Overseas Land & Investment lost 3.74 percent to dip to HK$14.92.

“These newly released measures will put further pressure on mainland developer stocks, which actually have been in a downturn over the past 4 months. The weaker-than expected debut of index futures contracts on the mainland market last Friday also hurt market sentiment,” Ng said.

Hong Kong developers also declined, with Henderson Land down 2 percent and Cheung Kong off 2.3 percent to its lowest in three weeks Monday.

China Daily

(HK Edition 04/20/2010 page2)

http://www.chinadaily.com.cn/hkedition/2010-04/20/content_9749865.htm

Attracted by Hong Kong’s role as one of the world’s top markets for raising funds, a number of Russia-based companies are eyeing IPOs in the city, especially after the listing of the world’s largest aluminum maker, Russia’s United RUSAL Co, in the city this January.

Other leading firms from the country, such as Polyus Gold and Kamchatka Gold, are believed to be considering a listing in Hong Kong within the year.

However, Russian investment bank Uralsib Capital believes only companies with special appeal will be attractive to investors.

“I am not expecting to see more than 20 Russian companies listed in Hong Kong in the next few years. Domestic-oriented and non-Asia exposed Russian companies will find it difficult to raise money in Hong Kong due to the lack of recognition. But for those big names with global presence, it will definitely be attractive to Asian and international investors,” said Oleg Lukhton, managing director from Russian investment bank Uralsib Capital in Hong Kong Wednesday.

He went on to explain the opportunities for Asian investors in the Russian market and the increasingly important role Hong Kong may play as a link between the economies of Asia and Russia.

“At this stage, the internationally renowned giants in Russia are primarily in the natural resource sector. The major sectors driving the country’s growth over the decade, oil and gas, account for 66 percent of the value of Russia’s exports, and almost half of the federal budget revenue comes from these sectors,” said Lukhton.

John Parker, managing director of Uralsib Financial Corp, said most Russian companies raised capital from London and New York over the last few decades, but they are still relatively unknown to the Asian markets.

He nevertheless sees Hong Kong as the best venue for Russia to raise funds in Asia.

“Hong Kong’s economy is so market-friendly that it poses no obstacle to new comers’ adapting. We also have noticed the effort that authorities have made to sustain Hong Kong’s attractiveness and that they are doing their best to promote the listings by international companies,” said Parker.

“Hong Kong is no doubt the best option for Russia to attract funds in Asia,” Parker added.

Parker said even if some Russian companies have already listed elsewhere, Hong Kong could still be attractive, as multiple listing in several financial centers is common for large enterprises.

Chris Weafer, chief strategist from Uralsib Capital said the Russian government has also set up structures to try and improve the country’s investment image and to try and attract a larger volume of foreign direct investment.

“We note a great sense of urgency from the Russian government, which is doing its utmost to bring in money to help our country develop its economy,” said Weafer.

Weafer said Moscow is keen to get close with Asia, and is carrying out new policies and redrafting regulations to attract investors to Russia, and to help the country develop industries, particularly those that have been neglected.

On its side, the Hong Kong government has already said it is keen to do more business with Russia.

At the opening ceremony of Russia’s Capital Raising and Investment Summit in Hong Kong on Tuesday, Secretary for Financial Services and the Treasury, KC Chan said Hong Kong can serve as the financial gateway for Russian companies to reach the Asian market, and since there is strong potential for economic partnership between China and Russia, Hong Kong can undoubtedly serve as the bridge between the two countries.

“Earlier this year, we saw the first Russian company listed on our stock market, and I am confident that more foreign-based companies, including many more Russian companies, will be looking to list on the Hong Kong stock exchange in the near future,” said Chan.

China Daily

(HK Edition 04/15/2010 page2)

http://www.chinadaily.com.cn/hkedition/2010-04/15/content_9731123.htm