According to the most recent calculation by Forbes Magazine, there are about 800 dollar billionaires in the world. As of last week, there may be one more, Huang Shaowu. And he’s a friend of mine.
On Friday, trading began on the Shenzhen Stock Exchange of mobile phone distributor and retailer Aisidi (爱施德) (Ticker: 002416) The IPO raised over RMB1.8 billion for the company, at a price-earnings multiple of 50. It leaves Shaowu’s holding company still in control of about 70% of the shares, now worth a little over $2 billion.
I was at the party to celebrate the IPO at the Hyatt in Shenzhen, along with about 300 others. The last time I saw Shaowu was about three weeks ago, after traveling around Shandong together for four days. Shaowu is a modest and sincerely warm man. He would never brag about his business. But make no mistake, he has a lot to brag about.
Aisidi is a leading distributor and retailer of mobile phones and Apple products in China. Its 2009 revenues were Rmb 8.75 billion (USD$1. 28bn), while net income reached Rmb875mn ($128mn). In the first quarter of 2010 net income rose by 70% over first quarter of 2009.
Aisidi got its start back in 1998, at a time when the mobile phone market in China was a fraction of its current size. That year, China Mobile had 25 million subscribers. As of now, they have over 700 million. In 1998, China was still then considered a poorer, developing nation. Shaowu took a big gamble back then, to begin distributing only brand-name mobile phones, and sell them at full market price. Shaowu saw more clearly than most the direction China’s mobile phone industry would take.
Aisidi’s business has grown enormously since 1998. It acts as the trusted distributor for many of the top mobile phone brands, including Samsung, Sony Ericsson as well as Apple’s iPhone. It also has partnerships with China Mobile, China Telecom, China Unicom.
Aisidi doesn’t distribute, sell or otherwise transact in any way with shanzhai manufacturers, the legion of manufacturers in China producing counterfeits and knockoffs that account for over 20% of all mobile phone sales in China. Aisidi sells only the genuine articles.
Aisidi is also the key part of Apple’s retail strategy in China, with a market share of 45% of all Apple products sold in China. The boss of Apple China was at Aisidi’s IPO party last week. I chatted with him, and for those who are wondering, there is still no timetable for when Apple’s new iPad will go on sale in China. When it does, it is certain to add significantly to Aisidi’s revenues and profits.
Way ahead of the pack, Shaowu saw that there was a market – and it turns out a truly enormous one – serving the Chinese who would pay top-dollar for phones they knew came straight from manufacturers, and would be repaired professionally and promptly if anything went wrong.
Shaowu built Aisidi to have the products and prices that allowed it to make money from the start and to become one of the larger private corporate tax-payers in China. Now as a public company, Aisidi has the resources to grow into one of China’s biggest entrepreneur-founded companies.
Shaowu made his money doing something that took guts and insight. It was a real joy helping him celebrate Aisidi’s IPO. His success is deserved. He is both a nice guy and a helluva businessman.