Chow Tai Fook's IPO reverses the transformation of family business

Due to the specific historical environment and development environment, many private enterprises in China are family-owned enterprises. In the family's kinship and kinship ties, early entrepreneurs worked together to lay the foundation for corporate development and ensure rapid growth in the early stages of corporate growth.

However, in recent years, with the gradual expansion of the scale of enterprises, the growth of the first batch of entrepreneurs, and the limitations of family members' experience and experience, many of these companies are facing the problem of “second generation” succession, which is followed by The collision and integration after the introduction of external professional managers, the contradiction between the new generation and the entrepreneurial family members in the process of enterprise expansion, such as "differing from one another, and not being consistent with each other," and many other issues.

Recalling that not long ago, Sun Hung Kai Real Estate Kuo family members and Li Ka-shing announced their property distribution plan. On the face of it, although it is only a grudge. However, it is evident from the perspective of the government. It is believed that most family-owned enterprises in China will not be able to avoid the changes caused by succession in the next few years. The problem is highlighted. Therefore, it is necessary for China's family-owned enterprises to take precautions and prepare for the destruction of butterflies.

With such doubts, some time ago, Chow Tai Fook’s insistence on listing in the market downturn was a bit intriguing.

Some analysts believe that gold has become a “safe haven” for investors to transfer due to the instability of the international economic and political situation and the downturn in the domestic stock market. Obviously, Chow Tai Fook looks bullish on the gold market next year, and ** increases inventory to reduce the cost of gold purchases.

However, the reverse market IPO is not only the name Zheng's insistence on pursuing the richest man in China, but also not just the anticipation that the gold market will fluctuate higher next year. Chow Tai Fook Jewellery is the most valuable asset of the Cheng Yu Tung family. It is of course necessary for us to stick to the listing. However, under the old training of “three generations but rich,” how to make the family business everlasting is probably its most concern.

Previously, the market speculated that Cheng Yu-hwan wanted to split up through the listing, but Cheng Yu-fu denied it on the day of the Chow Tai Fook Road show, saying that he would share the public’s most valuable asset, Chow Tai Fook, with the public, paving the way for the family’s fourth generation to prepare for succession. It is reported that at present the three generations of the Zheng family have "co-governance." Zheng Yuxi and Zhou Cuiying have two sons, namely Zheng Jiachun, 64, and Zheng Jiacheng, 59. The son of Zheng Jiachun, Zheng Zhigang, is 32 years old and Cheng Zhiheng, the son of Zheng Jiacheng, is 34 years old and he is a director of Chow Tai Fook Holdings and Chow Tai Fook Enterprises. Zheng Jiachun’s son Zheng Jiachun explained at a briefing session that Chow Tai Fook was listed on the market. The family is very cautious about going public. Through public listing, it can obtain supervision from public investors and strengthen corporate governance to maintain the company’s management quality.

After listing, Chow Tai Fook believes that the quality control of the product will be more stringent, although it has been done well before this. After the company's listing, due to market supervision, consumers' recognition and trust in their brands will increase.

It is worth mentioning that the 74.1% stake of Chow Tai Fook Holdings was ultimately held by two offshore companies - CYT Family Holdings and CYT Family Holdings II. The remaining equity was held by non-direct family members. Have. The “family” offshore companies whose two names are close to each other are the directors of the uncle and the eldest son Zheng Jiachun, who is known as the “pure official”.

According to professional sources in the family trust business, many wealthy families will set up trusts or offshore companies to hold family business in accordance with the number of brothers and sisters in order to avoid family ties.

Li Ka-shing and Cheng Yu-tung and other large families in Hong Kong have made good use of non-listed family-owned companies to control the spin-off of their main business listing models and have capitalized their leverage to the fullest. This model has great flexibility and strong leverage. It can control all companies without a lot of its own controlling stakes. Some mainland family companies such as Chen Tianqiao's grand are quite effective. However, there are a large number of related transactions between listed companies in this model, which limits development to a certain extent.

Wang Lan, vice president of Gaolan Diamond, believes that the personal family color of the domestic jewelry industry is relatively strong, such as Lao Fengxiang and Lao Miao gold are traditional old shops, and they are all family business models. Chow Tai Fook's listing, "I believe will lead more old stores to capital market operations."