Liu is the chairman of East Hope Group, a Shanghai-based conglomerate. The closely held company had annual revenue of more than 114 billion yuan ($16.3 billion) in 2018. It has about 24,000 employees and is involved in aluminum production, energy, agriculture, chemicals as well as commercial and residential real estate.
Yongxing Liu's net worth of $8.86B can buy ...
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Liu's wealth is derived from East Hope Group, a closely held conglomerate. The Shanghai-based company is owned by Liu, his wife and his daughter. Liu is credited with full ownership in the net worth analysis to reflect his status as chairman. The Shanghai-based group has about 24,000 employees and is involved in aluminum production, energy, agriculture, chemicals and real estate, according to the company's website.
The group had revenue of 113.8 billion yuan ($16.3 billion) in 2018, according a top 500 ranking by All China Federation of Industry and Commerce. Revenue for the aluminium and cement businesses has been estimated based on the ranking and financials from a 2017 bond filing by East Hope Enterprise Management, the parent of East Hope Group.
The aluminium unit is valued using the average price-to-earnings, enterprise-value-to-sales, enterprise-value-EBIT and enterprise-value-to-EBITDA multiple of three publicly traded peers: China Zhongwang Holdings, China Hongqiao Group and Reliance Steel & Aluminum Co.
The cement business is valued using the average price-to-earnings, enterprise-value-to-sales, enterprise-value-to-EBIT and enterprise-value-to-EBITDA multiple of five publicly traded peers: Tangshan Jidong Cement Co, Asia Cement China Holdings Corp, West China Cement, Ningxia Building Materials Group Co and Anhui Conch Cement Co.
The other East Hope Group businesses are valued at one-times sales based on 2018 financials as estimated from information in the top 500 ranking and 2017 bond filing.
The valuation was updated on Jan. 3, 2020 and this led to a $1.4 billion decrease in the net worth calculation. East Hope Group's materials and animal feed divisions were previously included here as separate assets. The methodology was changed to better reflect the bond filing.
A company spokeswoman, who declined to give her name, said the company declined to comment on the net worth calculation.
In 1980, Yongxing Liu was a 32-year-old factory worker and mathematics student at a teacher's college in the southwestern China city of Chengdu. He and his wife had savings of about $30, which was to be used for his tuition. Tradition in China dictates that families should gather for elaborate holiday feasts before the Chinese New Year festival in the spring. All Liu could afford that year was an 8-pound goose, which he gave to his 4-year-old son, Xiangyu, to hold. Xiangyu was so excited that he accidentally let the goose escape, and with it, the main course for the family's holiday dinner.
Dismayed and disgraced, Liu set-up a street stand to make money by repairing radios to buy meat for his son. He earned about $50 in the first week, almost a year's pay from his factory job. The experience impressed upon him the notion that as long as he worked hard, he would be able to get out of poverty, Liu said in an interview with the 21st Century Business Herald in 2010.
Two years later, Yongxing quit his job and joined his three brothers -- Yongyan, Yongmei and Yonghao -- raising and selling quail. They sold their watches and bicycles, and pooled $500 in start-up capital. A decade after China embarked on economic reforms under the leadership of Deng Xiaoping, the brothers founded Hope Group in 1991 and turned it to one of the biggest animal feed makers in the country.
The brothers split the business in 1995, with Yongxing taking East Hope Group, which diversified into aluminum production in 2002. East Hope is now headquartered in Shanghai, where it moved from Chengdu in 1999.