Sun Hongbin was born in 1963 in Linyi, Shanxi Province. He graduated from Tsinghua University with a masters degree in hydraulics, and by the late eighties was working at Lenovo as a computer salesman. His persistence in chasing outstanding payments, caught the attention of Lenovo’s founder, Liu Chuanzhi, who made him a branch general manager.
Then things went awry. Sun was accused of channelling customer payments for goods to finance his own team. In 1992 he was sent to jail for embezzlement.
Sun was released early, in 1994. One of the first things he did was to go back to his old boss. It looks as though Liu didn’t bear a grudge, as he lent Sun Rmb500,000 to set up a Tianjin-based property company, Shun Chi. In 2003, the company expanded into Beijing, and then 10 more cities.
Sun is no wallflower. At a real estate forum in 2004, he found himself engaged in an animated argument with Wang Shi, the chairman of one China’s largest real estate companies, Vanke. Sun declared annual sales worth more than Rmb100 billion, a claim most thought highly implausible.
Doubts were reinforced by further difficulties in 2006: with the company bogged down by near Rmb1 billion of debt, and a failed attempt to list in Hong Kong. Sun was forced to sell a majority stake for just Rmb100 million, a tiny amount considering it claimed a land bank exceeding 10 million square metres.
Second company lucky
Sun found salvation in Sunac, another property company that he set up in 2003, and sustained by funding from Lehman Brothers (remember them?).
Sunac’s fortunes were better than its financier’s. It focused on just five cities, avoiding the perils of rapid expansion: “We should have absolute control over risks to let our company survive,” said Sun.
With a prudent approach in place, the next step was to go public. Sun finally succeeded in October in a Hong Kong listing, raising $336 million, the first by a Chinese property company in the territory since February.
© ChinTell Ltd. All rights reserved.
Exclusively 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.