Liu dropped out of school when he was 14, to work with his family making leather handbags. He moonlighted as a taxi driver once he was old enough to drive. Then he began investing in the stock market. In 1990 he bought 100 shares in Yuyuan Garden Shopping Mall for Rmb100. He sold them two years later at a profit of almost Rmb1 million. He soon became a major investor.
Need to know
His investment vehicle – his Berkshire Hathaway if you like – is called Sunline Investment Company. It is a top 10 shareholder in over 10 companies, spanning medicine, chemicals, finance and real estate, with total assets of over Rmb2 billion.
Why’s he famous
Liu is known as the King of ‘Legal Person’ Shares. ‘Legal Person’ shares were created during China’s privatisation process in the 1990s, when state firms were converted to joint stock companies. They were not listed and were thus relatively cheap. But they still provided a substantive ownership interest.
Still, many investors shunned this share class. But Liu took more of a ‘private equity’ approach and realised that he could improve the performance of the companies. He also bet that over the long term this class of shares would merge with the listed class, and he would make capital gains.
In his own words
“Investment opportunities are fair for all. The key is whether you have the patience or not.”
And to relax
He likes to buy art. He started at the age of 30 and recently caused a stir by paying Rmb55.1 million for Rare Birds Sketched from Nature, painted by the eighth emperor of China’s Northern Song Dynasty, Song Huizong Zhao Ji.
An art industry insider told Southern Weekly that Liu’s collection could make up a separate exhibition in the Shanghai Museum. Liu says his returns from art have been even higher than stocks.
Keeping track: In WiC26 we profiled Shanghai billionaire tycoon, Liu Yiqian, and described how he’d become a big art collector. Last week he decided to prove that his move into the art world 18 years ago was financially astute. He auctioned one of his pieces, a painting by Qi Baishi. It sold for Rmb425 million – the second highest amount ever paid for a piece of art in China – and netted him a Rmb300 million profit. “I just wanted to test my taste for collecting by putting it up for sale,” said Liu. “The result again confirmed my decision to be involved in collecting.” (Jun 3, 2011)
© ChinTell Ltd. All rights reserved.
Sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.