How a 'Lone Wolf' tycoon created 68 millionaires with his water empire

 

Based on the HK$21.50 ($2.77) pricing, Zhong's 84% post-IPO stake in Nongfu is valued at $26 billion, putting his net worth at $38 billion.

He’s known as the “Lone Wolf.”

Zhong Shanshan has worked in construction, journalism, drug making and bottled water. Those last two endeavors have made him one of the world’s richest people, but he’s rarely quoted in the press, isn’t involved in politics and his business interests aren’t entwined with other rich families, such as the property tycoons. Hence the nickname.

That hasn’t hindered the popularity of Nongfu Spring Co., whose red-capped bottles are sold across China everywhere from mom-and-pop snack stalls to high-end hotels. The company is proving just as popular to investors. Its Hong Kong initial public offering was oversubscribed by 323 times by the end of last week and priced at the top of its marketed range.

Based on the HK$21.50 ($2.77) pricing, Zhong’s 84 per cent post-IPO stake in Nongfu is valued at $26 billion, putting his net worth at $38 billion. That would make him China’s third-richest man, behind Alibaba Group Holding Ltd.’s Jack Ma and Tencent Holdings Ltd.’s Pony Ma, according to the Bloomberg Billionaires Index.

Zhong, 65, is sharing some of his success. The prospectus lists 68 shareholders in addition to Zhong, with stakes ranging from 0.0063 per cent to 1.4 per cent. Some got their ownership last year, when the founder and his holding company transferred 0.79 per cent of Nongfu to 33 people as part of a staff incentive program.

“Often, the founders will put together these structures to name shareholders ahead of an IPO, or they might offer grants to long-time employees to reward them for sticking around to build the business with them,” said Clifford Ng, a partner at Zhong Lun Law Firm in Hong Kong. “It’s a fairly common practice in China, and you see it more in family-owned businesses who have had long-term employees.”