Liu Zaiwang, founder and chairman of curtain wall solution provider Jangho Group, reveals that the group is working on an innovative O2O (online-to-offline) platform that applies a B2B (business-to-business) model to improve their exposure to more individual customers through existing clients. (RoyLiu/ China Daily)
For Jangho Group Founder and Chairman Liu Zaiwang, there are two decisions he considers the most important in his life — marrying his wife and acquiring fitting-out services company Sundart Holdings Ltd in 2012.
After establishing curtain wall construction company Jangho Group in 1999, Liu says he was attracted to the reputation of Sundart, which has provided fitting-out works for residential property and hotel projects in Hong Kong since 1996 and expanded to Macao in 2005.
“There were no sales people in Sundart and all of their projects were invited by customers through public praise. The decoration team in Sundart is of a high standard.”
Having already worked with Sundart in 2006 on the City of Dreams project in Macao, Liu says that is when he knew Sundart was the leading platform he was looking to acquire.
It was also the world-leading system, governance and professionalism of infrastructure and real estate in Hong Kong that attracted Liu, adding that the city’s expensive property prices makes it essential for excellent interior decorations.
Sundart is the largest fitting-out contractor in Hong Kong and Macao based on its 2014 revenue, with 6.1 percent and 15.5 percent of the market share, respectively. But Liu says this can only keep growing.
He says Jangho Group gives strategic advice and bank guarantee resources to support Sundart. The remaining operation is under the management of current Chief Executive Officer Ng Tak-kwan.
Between the 2012 acquisition and the company being listed in Hong Kong last year, Liu says Sundart’s annual profit has shot up nearly five-fold — from HK$80 million to HK$380 million.
The net profit for the first half of 2016 was HK$246 million, with a year-on-year increase of 27.4 percent and a gross margin of 18.4 percent.
Despite the plummeting fortunes of Macao’s gaming sector and the slowdown of the Hong Kong economy, Liu says Sundart’s business is not correlatively affected as when the economy dips, clients usually seek re-decoration to strengthen competitiveness.
Sundart Chief Financial Officer Jim Xie Jianyu says that, as the biggest player in terms of market share, the company has competitive bargaining power during an economic downturn. This includes negotiating discounts with suppliers and providing optimized plans when clients slash budgets.
Up until June 30 this year, Sundart had a total of 30 fitting-out projects (21 in Hong Kong and nine in Macao) on the go, with each individual contract worth more than HK$50 million. The total value of these projects hit HK$6.79 billion, with the remaining works to be completed at HK$3.82 billion.
Aside from existing markets, Liu says the company wants to duplicate its existing professional business model and experience to expand to broader markets, including the Chinese mainland.
He also aims to develop Sundart into a growing blue-chip stock, adding that the current dividend payout ratio of the company is relatively high and they will continue distributing a dividend twice a year.
Including its wholly-owned subsidiary Sundart, Jangho has five brands — Jangho, Gang Yuan, Steve Leung Designers and Vision. These extend to more than 20 countries and regions around the world.
The revenue of overseas business accounts for 40 percent of Jangho’s total profit, and Liu says they are endeavoring to build a comprehensive industrial chain covering curtain wall, interior decoration and ophthalmology treatment, as well as related businesses, to enhance cultivation of the group externally and internally.
Liu says Jangho has invested in an Australian medical company this year, becoming its largest (non-controlling) shareholder. It will invest in more healthcare industry projects, focusing on specialized hospital and primary health, such as clinics and community hospitals.
“The group aims to not only provide a sophisticated living environment, but also the physical health of humans to society. And, in future, the group will focus on development in both environmental and healthcare fields, and through both A- and H-share platforms.”
Liu says they are also working on an innovative O2O (online-to-offline) platform that applies a B2B (business-to-business) model to improve their exposure to more individual customers through existing clients.
‘A willingness to pursue excellence leads to action’
For Jangho Group Founder and Chairman Liu Zaiwang, entering the curtain wall industry and building it into an empire from the ground up was a mixture of good luck and hard work.
Born in Yueyang, Hunan province, Liu told China Daily his foray into the industry came by chance after he gave up his university studies to start his own business.
In 1990, he was accepted into Northeastern University and majored in mining. He recalls that he chose to study mining as the government offered a tuition subsidy for the major, and his family was too poor to afford his tertiary education.
He says while it was difficult to gain entry into university, he made the decision in his third year to quit and enter entrepreneurship.
Liu says many people at that time were inspired by the late Chinese leader Deng Xiaoping’s South China tour in 1992, and flocked to private business afterward. He sensed that China would certainly open up gradually, and transform into a market-oriented economy.
After dropping out of university, Liu tried his hand at various businesses but it was in the curtain wall business where he struck gold.
“Starting one’s own business can put self-initiative into full play and is as difficult as riding a tiger and (you) cannot easily dismount, especially in the beginning.”
He recalls the time when Jangho Group’s business was greatly impacted by the global markets during the 2008 financial crisis, at a time when the group was expanding its business globally at a fast pace.
Liu says once you decide to start a business after careful consideration, you should never give up and be persistent in moving forward.
When asked about the key factors of how he developed Jangho into an industry-leading company in such a short time, Liu says he relies on gumption, an enterprising spirit to pursue excellence and never to be satisfied.
“Your willingness to pursue excellence leads to your action, and your action leads to results.”
But most importantly, excellent work cannot be achieved by one person and good business requires an outstanding team to work closely and with synergy, Liu says.
He emphasizes that teamwork is important and management should reply on team members, and every employee should always keep a learning altitude to learn from peers, the advanced and even competitors. He said excellent work cannot be done by only one person and a good business requires an excellent team to work closely and synergistically.
Liu says charity is very important for him, and he donated 500,000 yuan (US$72,400) to his alma mater Northeastern University in 1998. During the university’s 90th anniversary, his family made a 50-million yuan donation to help build the Jangho Architectural Institute. He says he also supports infrastructure construction and education in his hometown.