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Maverick multi-billionaire Chen Sheng

By Fan Feifei (China Daily) Updated: 2015-12-28 10:39

Maverick multi-billionaire Chen Sheng

Chen Sheng, chairman and president of Tiandi No 1 Beverage Inc.

After civil service, real estate, beverages, food and education, Chen Sheng is looking for stiffer challenges

You may be forgiven if you assume Chen Sheng, 53, a newly minted multi-billionaire, must be one of those super-successful Chinese Internet startup founders. But the chairman and president of Tiandi No 1 Beverage Inc believes new-age businesses are not the only route to riches.

In fact, Chen swears by traditional industries. What's more, he rides a variety of them: real estate, beverages, food. Wears other hats too: darling of the capital markets, potential investor in startups, public speaker, founder of an educational institution.

And to think he started his utterly fascinating career as a civil servant in his hometown Zhanjiang, Guangdong province, after receiving a bachelor's degree in economics from Peking University in 1984.

A few years in civil service convinced Chen he is made to do and achieve different things in life. So, in early 1990s, he set up a real estate company in his hometown. It went on to become the market leader in the city's real estate sector in just three years.

The diversification into the beverage business happened by chance.

"In 1997, a visiting central leader chose to mix Sprite (a lemon-flavored fizzy softdrink) with vinegar at a banquet in Guangdong. That formula became a rage. Sensing an opportunity, I decided to explore the market potential for a vinegar beverage," said Chen.

Eighteen years on, Tiandi No.1 is now China's largest vinegar beverage brand with a more than 40 percent market share. In his home province Guangdong, the drink commands an 80 percent market share.

On Aug 20 this year, the Guangdong-based Tiandi No 1 Beverage Inc listed on the National Equities Exchange and Quotations, also known as New Third Board, and its initial public offering raised 175 million yuan.

In October, the company issued additional shares to raise 625 million yuan more, pushing its market valuation to about 13 billion yuan, and the worth of Chen's more than 80 percent stake in it past 10 billion yuan ($1.58 billion).

That put him just behind Wu Gang, president of JD Capital Co Ltd, an investment firm, among the founders of companies listed on the New Third Board. Wu's net worth is estimated at 18 billion yuan.

Why the New Third Board? "We want to raise more capital for mergers and acquisitions, especially at a strategic level," said Chen.

According to Tiandi's latest financial report, in the January-June period, the company's revenue soared 99 percent year-on-year to 639 million yuan, yielding a net profit of 148 million yuan.

In 2013 and 2014, revenue was 1.17 billion yuan and 1.13 billion yuan, and net profit was 314 million yuan and 253 million yuan, respectively.

But Chen isn't just known for Tiandi's financial success. He is the "king of pork" in Guangzhou. And that story began by chance as well.

In 2003, a television crew in Xi'an found that a graduate named Lu Buxuan, also Chen's university mate, sold pork in a local market for a living. Lu's story was to stir the nation's conscience.

"I also watched that piece of news on TV," said Chen. That influenced his foray into pork, especially after he discovered the chaotic pork market presented a business opportunity.

Chen set up Guangdong No 1 Food Co Ltd to focus on research and development in domestic pigs, their rearing and pork sales at a time when imported pigs held sway.

"Since China's reform and opening up, more and more foreign pigs were introduced into the country. Their popularity was at the expense of domestic breeds due to their lower cost. Also, you need shorter time to raise imported breeds. However, the quality of domestic pork is much better, more tender and juicy," said Chen.

He is confident history will repeat itself. There was a time when the Chinese largely consumed domestic pork. Now, with rising incomes and aspirations for high-quality life style, more and more people have the means to afford domestic pork. It's only a matter of time before they rediscover their taste for Chinese pork. So, in just two years, Chen grew his pork business to a 200-store chain with an annual revenue of 200 million yuan.

Chen also invited his fellow alumnus Lu as a guest teacher to the butchers school in Guangdong that he founded. "Lu designed a training course in pork sales. He has so much experience selling pork," Chen said.

The pork chain has since expanded to 800-odd stores, reaching Beijing, Shanghai, Guangzhou, Shenzhen, Foshan, Zhongshan, Zhuhai and other cities in Pearl River Delta, with annual revenue of more than 1 billion yuan.

"I dislike the idea of going with the flow," Chen said. China's youth, he thinks, should realize there are business opportunities outside the arena of internet startups. In a speech at his alma mater, Chen told students he is a "buffoon" because he does unfashionable things like investing in out-of-fashion industries. But he also told them being a butcher isn't easy.

"If I start a business, I will not go into the Internet area, but if I invest, I might consider funding some internet startups because I can get returns in a short time. I need to wait at least eight to ten years to get results in a traditional industry, but I can gain profit in just three to five years once an Internet enterprise gets listed."

More than earning billions, what keeps Chen going is the thrill of taking on challenges. He is aware much of his pork sales come from Beijing, Shanghai, Shenzhen and Guangzhou. Since his businesses are confined to specific regions, he wants to expand his empire's footprint so as to be on par with companies that have a China-wide presence. That could mean getting No 1 Food Co Ltd listed on the New Third Board. Chen said plans to that effect are underway.

BIO

Chen Sheng

Chairman and president of Tiandi No 1 Beverage Inc

Year of Birth: 1962

Birthplace: Zhanjiang city

Education: Bachelor's degree in economics from Peking University, EMBA from Tsinghua University

Career:

1984: Civil servant with the government of Guangzhou

1990s: Set up a real estate company in Zhanjiang, Guangdong province

1997: Set up Tiandi No 1 Beverage Inc

2004: Set up Guangdong No 1 Food Co Ltd

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