Bank of China

Lee makes mark as savvy stock picker

PUBLISHED : Monday, 16 April, 2007, 12:00am
UPDATED : Monday, 16 April, 2007, 12:00am

Property tycoon's investments have doubled holding company's asset value to HK$100b

Lee Shau-kee - chairman of Hong Kong's third-largest property developer, Henderson Land Development - has garnered more fame for his stock-picking savvy than real estate investments in recent years.

Up high at Henderson's headquarters on the 76th floor of Two International Finance Centre are 10 plaques awarded by financial institutions such as Morgan Stanley and Merrill Lynch, dubbing Mr Lee as the 'God of Stock Investment'.

'Take a photo of them, one by one, starting from the far end,' Mr Lee, the second-richest man in Greater China, said during a photo session and an exclusive interview with the South China Morning Post. It all started in 2004, when Mr Lee set up Shau Kee Financial Enterprises with a portfolio of HK$50 billion.

Since then it has doubled to HK$100 billion, and Mr Lee has also earned a reputation as 'Asia's Warren Buffett'.

His advice is keenly followed by local retail investors, who in past years tended to pay more attention to another tycoon - Hutchison Whampoa's Li Ka-shing.

Take Country Garden Holdings, a Guangdong-based property developer scheduled to list in Hong Kong this month.

After Mr Lee named it as one of his four mainland property stock picks, Country Garden's initial public offering received HK$310 billion worth of retail orders, making it the second-most popular in Hong Kong after Industrial and Commercial Bank of China's listing in October last year.

His other picks - China Overseas Land and Investments, Guangzhou R&F Properties, Agile Property Holdings and China Resources Land - have also surged, with R&F jumping 24 per cent.

Mr Lee said his success was not due just to luck, but was the result of prolonged study on global macroeconomic trends.

'This investment strategy can inspire many people,' he said.

His strategy - start by picking the right country and then choose stocks that are among that nation's pillar industries.

'I am always pessimistic about the US economy. It may look good on the surface but underneath it's another story,' Mr Lee said. 'Only emerging markets will see high growth potential. Among them, China is the best.'

Mr Lee also said investors should always pay close attention to the changing market situation.

'Investing in banking and insurance stocks is good but prices of these stocks have surged since last year and it is about time to invest in mainland property stocks,' he said.

'When Japan's economy turned a few years ago, I invested in banking stocks and these shares have surged. For every dollar of principal investment, the result has been a two-dollar gain.'

After the gains in the Japanese market, Mr Lee refocused on the mainland, snapping up insurance and banking stocks during their offerings in Hong Kong.

Mr Li used the principal and the profit to make his forays.

'These shares rose two to three times. My one dollar invested in Japan's banking stocks then grew to nine dollars.'

Mr Lee said the banking and insurance companies - mainly state-owned enterprises such as China Life Insurance, Bank of China, Bank of Communications and ICBC - remained a part of Shau Kee Financial's portfolio.

Now, given the strong demand for housing in the mainland, Mr Lee expects related stocks to see 'several times growth'.

'I hope to double the size of Shau Kee Financial to HK$200 billion in the next two to three years.'

Apart from advice for the stock investor, Mr Lee also dispensed some tips for enterprises operating in Hong Kong.

'The US dollar will not go well because of its uncertain economic outlook. The Hong Kong dollar is pegged to the US dollar, so its prospects will not be promising either.

'If you are in the financial industry and not a property developer, you should convert your money into a basket of foreign currencies, mainly Australian dollars and Japanese yen,' he said.

'You will gain more if these currencies appreciate.'