Sat, Apr 29, 2017 - Page 11 News List

Chinese jewelry retailer becomes IPO billionaire

Bloomberg

Chinese gem retailer Zhou Zongwen (周宗文) became a billionaire when shares of his Chow Tai Seng Jewellery Co (周大生珠寶) surged following its initial public offering (IPO) this week.

Shares of the gold and jewelry seller yesterday rose another 10 percent to 31.55 yuan in Shenzhen, giving Zhou a net worth of at least US$1.4 billion, according to the Bloomberg Billionaires Index.

Zhou, the company’s chairman, owns 65 percent of the Shenzhen-based business along with his wife and son, according to the company’s IPO prospectus.

Chow Tai Seng’s stock has reached the daily limit in both of its trading sessions since its debut on Thursday.

Chinese IPOs in recent months have usually surged on their first day of trading, in part because of a regulatory cap on the price of new listings.

Enthusiasm for the company’s shares reflects an optimistic outlook for China’s gold retailers combined with strong demand for new listings, Shanghai-based analyst with Capital Securities Corp (群益證券) He Minliang (何明亮) said.

He said he expects China’s jewelry market to grow about 8.2 percent this year.

Zhou founded the company in 1999 and has grown the business using a franchise strategy that sets it apart from Hong Kong-listed competitors Chow Tai Fook Jewellry Group Ltd (周大福珠寶) and Chow Sang Sang Holdings International Ltd (周生生集團).

Chow Tai Fook was the source of a US$12.7 billion fortune for Cheng Yu-tung (鄭裕彤), who died in September last year.

The strategy has enabled the company to increase its retail network to nearly 2,500 outlets across China, up from about 150 stores in 2006, despite having direct control over just 12 percent of those stores.

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