Since Xi Jinping took over as Chinese leader, which private-sector firm on the country’s stock markets has gained most in market value? The answer is Shanghai RAAS Blood Products. Shares in the Shenzhen-listed blood plasma provider have risen nearly 10 times over the past five years, adding nearly $14.5 billion in market cap. Zheng Yuewen, an influential fund manager, is the key man behind Shanghai RAAS’s incredible rise.
Getting started
Zheng was born in Fujian in 1962. After he graduated from the Jiangxi University of Finance and Economics in 1985 (he would later obtain a PhD at the same college) he joined the railway ministry and later the China Earthquake Administration as an accountant.
Zheng left the public sector in 1988 and started a publishing firm, providing updated financial and economic information for bureaucrats. The start-up earned him his first fortune. In 1992, as the government made a bigger push with its economic reforms, he joined five friends to start Creat Group, one of the country’s earliest private equity firms. Creat invested in a number of the better-performing credit cooperatives, some of which would grow into regional lenders such as the Bank of Nanchang and Bank of Dalian. The move gave Creat invaluable access to capital and Zheng’s fund house invested in a number of promising start-ups such as Henan Pinggao Electric, now a leading maker of high-voltage switchgear.
Drawing first blood
Creat’s most successful pick was its investment in human blood. Shanghai RAAS was formed in 1988 by Vietnamese-American businessman Hoang Kieu as a joint venture with the Shanghai Blood Centre. Creat came into the same market in 2000 by investing in Boya Bio-Pharmaceutical, a rival firm. Four years later it bought a major stake in Shanghai RAAS as well.
Shanghai RAAS went public in Shenzhen in 2008 as one of the minnows on the SME Board.
Since 2012 RAAS has been on an acquisition spree, taking over domestic and regional rivals. It is now the country’s largest seller of plasma-based therapies, or medicines made from blood components used during surgeries or for disorders like haemophilia.
The company is worth more than Rmb100 billion. Creat and the Hoang family each controls about 35% of the shares. In the 2016 Hurun Rich List, Cheng was ranked the 66th richest tycoon with a net worth of Rmb26 billion. Hoang Kieu is worth about the same at $2.7 billion, according to Forbes magazine.
Need to know
Zheng isn’t a member of the Chinese Communist Party. Nevertheless he is one of the 59 private-sector investors whom the government trusted to co-found China Minsheng Bank in 1996.
Chinese media outlets have suggested that Zheng is also a member of the exclusive Taishan Club, an unofficial association of entrepreneurs named after a famous mountain in Shandong (see WiC335).
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