iPhone’s biggest screen maker seeks to raise HK$10 billion in Hong Kong IPO
Every swipe on a smartphone brings a smile to Yeung Kin-man’s face. He is the founder of Biel Crystal Manufactory, the world’s largest producer of cover glass, used in two of every three of Apple’s iPhones sold in the world.
Yeung plans to sell Biel’s shares on the Hong Kong stock exchange this year, aiming to raise more than HK$10 billion in what would be the city’s second-biggest initial public offering of 2017. The 64-year-old tycoon is seeking capital to expand into industries with higher returns, such as property development in Hong Kong and China.
“No industry can keep growing,” Yeung said in an exclusive interview with the South China Morning Post. “I hope to develop property as a new basket of our businesses.”
Yeung is no stranger to properties, having paid HK$2.8 billion in January for a mansion on The Peak in Hong Kong. He has accumulated land in the city’s Kwun Tong district, as well as in Huizhou in China, where Biel runs a factory with 80,000 workers.
The property industry is a good bet, because “phones will become valueless if they fail to attract buyers,” he said. “The value of a good location will continue to rise even if you do not develop it, and just sit on the plot of land for years.”
Biel – its Chinese name (伯恩) is a word play on the phrase “blessed” – was founded in 1987. Yeung began his career producing glass for Hong Kong’s dwindling watchmaking industry during the 1970s, opening his first factory with 100 staff.
His big break arrived in 2003, when Motorola approached Biel to produce the glass cover for its Razr series of mobile phones.
“Motorola just showed up one day and gave me an order to produce one million glass screens for the Razr V3 phones,” said Yeung.
The phone, with regular appearances in the first two series of HBO’s hit programme Entourage, went on to become the world’s best-selling clamshell phone, selling 50 million units of the V2 version, and 130 million of the V3 upgrade.
The business never looked back, but really got its transformative moment with Apple’s 2007 release of the first iPhone. The age of the smartphone had arrived, requiring manufacturers to ditch their tiny plastic windows and the keyboard for large, glass covered screens that were both touch sensitive and scratch resistant.
“That was the turning pointing,” Yeung said. “Other smartphone makers gave up their plastic screens and adopted glass, and they all came to us. We had about 5,000 to 7,000 workers at the time.”
In its 10th year, Apple has sold an estimated one billion iPhones, making it the most widely sold phone model in history. Riding on the wave of the iPhone’s success, Biel also supplies glass screens for Samsung’s smartphones, as well as devices made by Huawei Technologies, Oppo and Vivo.
“Compared with the phone makers, we were very small, but we were the biggest in the glass screen industry at the time,” Yeung said. “They couldn’t find anyone better than us.”
Biel is the dominant producer of glass covers, producing the material for smartphones, smart watches, tablet computers and notebooks, in addition to analogue wrist watches.
Revenue was 36 billion yuan (US$5.3 billion) last year, with gross profit margin in the double digits, Yeung said. He has 140,000 employees on staff, mostly in Shenzhen and in Huizhou, Guangdong province.
Business has been booming so much that Biel is spending five billion yuan to expand into its third manufacturing plant in Huizhou with 300,000 square metres.
The next phase of the business will be to step out of the mould of being a nameless vendor of other branded products: Biel plans to develop products under its own brand, including glasses for eye wear.
“We will not go into the mobile device industry to compete with our clients. We manage the technology to produce high-transmission cover glass by adding a water-resistant, scratch resistant, anti-reflective coating to the cover glass. That is good to produce eyeglass lenses with our brand,” Yeung said.