Analysis of Li Ka-shing

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					Analysis of Li Ka-shing
Behind the myth and misunderstanding, Li Ka-shing not explain the concepts,
methods and mentality
He has a pair of much of the pupil, but the eyes are not particularly sharp, but soft and
explore, like children's curiosity as to flash with. Speak Mandarin and
English, He spoke little, but loud and frustrated. Each say a few words, he will
subconsciously smile, give people without a sense of sophistication.
He also is not a happy show themselves in the business who has unusual insight. For
most questions, he answered quickly and have a sense of jumping, not the logic of
discourse and interpretation of strong feeling. He seems more willing to talk about
themselves on the Chinese people think, act thinking habits, views on philanthropy
and the memories of years ago. Some extremely simple analogy of thinking and
dotted in the story, which helps make him more like an intention to educate future
generations of elders. From time to time, he also warned: "You do not
understand ask me."
If there is anything that I most want answered here from the Li Ka-shing, and that is
why many entrepreneurs easily ruin a business, while Li Ka-shing is almost not touch
the "ceiling"?
He casually replied: "In fact, very simple, my day more than 90% of the
time not used to this thing, but to next year, five years later, things."
People have tried to use the "stock god" Buffett's
thinking framework to explain the Li. On the surface, they share many similarities:
Both are very good at allocating capital, aversion to debt, strong cash flow business
love, and will reshape the situation for the poor old company a "value of
the machine." But easier said than Buffett's methodology -
through holding companies and get a lot of float, follow the teacher
Graham's "value investing" theory, the intrinsic value
of Buffett's investing in undervalued large company, allowing its own
management, access to bonus - Li Ka-shing's style is difficult to be simply
Li Ka-shing's reputation in the global business community, mostly from in
some very imaginative investment and trade, which earned him a "smart
asset trader" reputation. But one can not explain is that while the Lee has
never been positioned as a Jack Welch-style distinguished managers, can be since
1979, Lee has been a successful and effective control of the diversified company.
Moreover, as a "empire-builders who", Lee's skills
can be said, He'll, like, like a patient investor will be capital accumulation
Yu De Mouyilingyu, Cheng Shou loss Yaliweichi some businesses will also create at
the right time to Xinxing Industry The concept of high-profile and capital market
integration, in order to finance an industry gradually proceeds to do by the virtual
reality. He dared to risk large market policies bets, often to get out, and he was not
optimistic about a number of early investment and will receive hundreds of millions
in return.
This unrestricted business growth strategy, under the effect of the use of the Li Ka
Shing wonderful. In 1979 he entered the nearly 700 million Hong Kong dollars and
Hutchison Whampoa, to 2005, profits reached 143 billion. In the early 1990s, more
than 60-year-old Lee, in the past 16 years, still lead with its flagship company,
Hutchison Whampoa, will rise by nearly 15 times. During this period, outside
estimates, Lee personal wealth increased from 2.5 billion to 18.8 billion U.S. dollars,
becoming the global Forbes list of the richest people on the ninth.
But for those imitators, the values in the absence of clearer description, whether
Lee's diversification strategy is a means to buy high and sell low, very
easily be misinterpreted as opportunistic financial skills games. Although, as Lang
had to sum up Lee's strategy for business diversification, globalization,
sound financial policies and "not the first," but these four in the
tendency to avoid risks as the core but does not explain why Hutchison 3G services
appear to invest in more than 25 billion U.S. dollars, to fight for the world's
leading 3G operator business potential? Why and yellow to become one of the few
Chinese companies to diversify and smooth international company?
What really should learn to Li Ka-shing?
"Li Ka-shing has been change and improve their business model. You can
not do anything to learn his business, doing what portfolio. Because these things with
his background, goals, personal preferences, the company's foundation, the
external environment are too more relevant. "Guo Guangchang, chairman
of Shanghai Fuxing High Technology Group on" Global Entrepreneur
"said:" We should think about is how his logic is formed? why
he made this decision at this time? how he got to do this decision? his feelings that?
he thought at that time is what? "
Kuo seems that he learned from the Li Ka-shing who has learned there are three: First,
consolidate existing business, technology, management ability, not to refuse to find
new opportunities. Second, do not do business in the desire to launch new type of
assumptions, early assessment of whether the loser of yourself. 3, can support the first
two is the mentality. There is only one wise inner balance mechanisms in order to
make him not only good offensive, challenges persist in looking for, but also has
enough self-control, does not become a gambler.
Lenovo Holdings president Liu Li Ka-shing is unique in that is two points:
"Li Ka-shing is obviously a very pragmatic person, he would not go to
busy the company did not do charity, but when he wanted to do charity, it is a great
are mine. In addition to practical, he was not confined to Hong Kong's real
estate business, his vision has proved beyond many entrepreneurs peers. "
Essentially, these two arguments are beyond the basic methodology, but closer to an
entrepreneurial training. This is Li Ka-shing was resolved less secret: a more than ten
years and who worked with Lee as "the Heart."
Interview, Li Ka-shing made a gesture, the right palm was first gentle glide angle of
15 degrees, to a point, is about to become 50 degrees, make up like. The meaning is:
28 years old, he already knew the students can say goodbye with the poor, but happy
to work the next work, this is done for 50 years.
【"Heart, head and create stress,"】
Li Ka-shing's style at the beginning of the study in more detail, we first
tried to answer a more basic question: Li Ka-shing is the work?
On their work habits, the most well-known details of the rest of his time: whether go
to bed, some in the morning 5:59 to get up after the alarm rang. He then listen to the
news, playing golf one and a half hour. Lee has not received professional training in
golf, posture can not be considered standard, but the results are usually good. He
believes that a focus on playing each ball is to remain calm, well-planned.
Every morning, Lee received a desk all day in the global news list, according to topic,
he chose his hope that the full reading of the article, translated by the Commissioner.
Typically, these on the global economy, changes in industry reports, the entrance is
instructive to think Li Ka-shing.
"He was a great sense of crisis people, let him balance a sense of crisis and
the way to inner peace, ahead of the first to create a company in the heart of
adversity", the people who know Lee said: "He saw all kinds of
reports, and ideas own company's situation, to find those loose parts,
meeting to change. and so he was ready to have become the face of adversity comes
opportunity. "
This is what Lee called "90% of the time think about the future."
He is not a favorite to access information through endless meetings to solve the
problem of people, in Hutchison Whampoa and Cheung Kong's meeting,
he heard reports of the time each no more than 15 minutes. More often, like Lee
himself to read, analyze, judge.
Although not received much professional education, but the Li Ka Shing love figures.
Not only is its 3G mobile phone all day, all of which will receive the global 3G
market and business data, he also loves to read annual reports extensively. He claimed
to be on any one company within the Group in recent years the development of digital,
precise data over a 90%: "look can remember, because I put."
He was fond of from 20 years of age in reading the annual reports of other companies,
in addition to looking for investment opportunities, but also learn from other
company's accounting treatment has the advantage and shortcomings, and
the distribution of corporate resources.
Such near-mysticism of the work to function effectively depends on a kind of Lee to:
he will make a lot of complex information broken down into a few relatively simple
For example, in 1999, on "how to keep the company in the mobile
communications industry, the rapid development" of such a problem, too
many conditions and changes in the standard answer is very difficult to find. But Lee
will be real problems disassembled into two categories: One is how to change what
the market itself? The other is whether the Orange upgrade their capabilities through
In the first issue, he obtained three judgments: voice business, too much competition,
the rapid growth of data services, Internet boom have made the mobile
communication company's market value to new heights. As for the wish to
undertake M & A management, he also made four relatively clear conditions:
acquisition target steady cash flow needed to complete the debt ratio after the
acquisition may not enhance the Orange, and Yellow on Orange needed to maintain a
controlling stake of 35% obtained acquisition of the company's absolute
A description of the problem before the imperative to respond to technological
transformation, the latter problem is difficult to achieve in the four conditions, two
integrated, Lee and Wong quickly in about 45% stake in Orange Shou Chu, received a
14.6 billion U.S. dollars net profit. Although the big deal triggered a continuing
debate on the Lee - he is a dealer or a builder? - But people close to the view,
"for the construction and trading, and their assets do not fall in love, it is
Mr. Lee did not own a manifestation of the limitations."
In addition to experience and intuition, such discretion can also be interpreted as, he is
those endless questions. Even in a secondary school student to the Sao Paulo
exchange, he will also issue asked: Do you sit down and play every day, 23 hours of
computer games, have not thought about the development of the entire game industry
is like? What is the procedure behind the game running?
Most of the time, Lee six day work, home, in addition to dial an overseas phone call,
he still has two compulsory homework: English language programs along with
subtitles read aloud, and reading at night. In addition to novels, he broad range of
books, and set a theme for each stage (most recently the theme of religion). Both work
means one thing: his greatest fear is missing witness the changes in the world.
Day of Peace, Lee on the clothes, food demand is very low, he said he's in
good condition mainly because of simple and a good night rest. "I Mei
Tian Du sleep well at night, because on the name, I Xingshi cautious, people my name
by Bu Rong Yi, Li Fang Mian, Quan Bucong right path 而来." Li said.
Have ownership
Person seems familiar, so that Li Ka-shing peace of mind, in addition to heart
indifferent to fame and fortune, there is a more basic reason: He's the
business have good cash flow.
Lee on the cash flow high care, rich famous. He often said that the sentence is:
"a company even if profitable, can bankrupt a company's cash
flow is positive, then it is not easy to close down." And to ensure cash flow,
he also worked to balance the rate control to a lows: "Since 1956, I have no
debt and a private company, even if there are 'false loans', for
example, relations of any debt due to the tax, but we have a sum of cash immediately
into similar assets in the bank So experience is not afraid of any storm. " In
addition, he always used a very conservative accounting methods, such as acquisition
of Husky Energy Inc. at the beginning, he asked extraction wells, even if not started,
there will also reimburse expenses - this although the accounting concepts for finance
in the short term report does not look good, but to allow managers have a stronger
sense of concern for the company's weak link.
Hidden behind the numbers is such a logic: the threat of no cash flow, debt depends
on its own, let most of the problems is not a passive decision, Lee would have the
greatest possible autonomy of the business. In cooperation with the Li Ka-shing who
seems very much, "take ownership" is the core idea of his.
This seems contrary to Li Ka-shing familiar with the outside world: only from the
results look like a never dare Huozhongquli Lee transactions udarnik, nothing can
prevent him from ambitious expansion ever -
50 years ago, Li Ka-shing as now many domestic manufacturing firms as
entrepreneurs, operating with a plastic flower factory. Follow the trend of
accumulation in the manufacturing sector to the pot of gold, he explosive growth of
population in Hong Kong for 70 years to seize the real estate opportunities. Since the
mid-1980s, and the yellow oil fields in the communications and to seek the layout, in
1990 the launching of the global port expansion. In 1991, Simon Murray, managing
director of Hutchison Whampoa's external said: "For us, a little,
we began to think and hit a wall." Department of Cheung Kong was 80%
of the profits from its operations in Hong Kong. After long-term adjustment and
upgrading, 20 years later, and Huang have input on building a portfolio spirit of the
times: 3G communication services, real estate in China, related infrastructure
construction, oil exploration and refining, and the port. Now, only the Hong Kong
operations to the company's overall revenue by 20%.
But in actuality, Li Ka-shing is extremely risk-averse person. A minor: 70 layers in the
Yangtze River Center conference room, someone placed a wooden portrait gift Li
Ka-shing. The Chinese old accountant to dress in her hand, hold a jade of this scale,
but for fear of being broken, Lee Yu-scales will be put away altogether, leaving only
the portrait.
Although Lee does not begrudge the external repeat explain their methodology:
"Do not forget the development of healthy, stable development of
Sino-forget", but because it sounds simple, almost empty, and the Li Ka
Shing too many people too much emphasis on "development"
aspect of the experience to ignore the balance between the two - who often think of
diversified business portfolio and the international market with full resistance to risks
and yellow, but less than the asking: What started in support of Lee endless expansion?
Why is diversity so that other companies are usually cash flow tight, and Huang was
able to make some great market scale cultivation?
And Huang in 2001, business started to invest in the 3G (Worldwide, a subsidiary of
Hutchison's 3G called the "3"), Li Ka-shing is a fresh
sample into the new business: Although Hutchison has never announced its total
investment , but the market is estimated at 25 billion U.S. dollars. It's easy
to be seen as a gamble, and yellow for the case, but called a very patient and
well-prepared action.
Li Ka-shing therefore sell its 2G business (Orange in Europe and the United States
Voicestream), rather than its implementation and updating of the existing user base, a
main concern is: Since this is a technological change, opportunities, and new
technology rise is not known what specific time, if the retained business, it may
appear for the old and new business investment options in the wandering
embarrassment. High in the market to sell 2G business, not only was a very sufficient
cash, but also a determination to leave no burden of the move.
After two months out of Orange, and yellow on the acquired business in the UK 3G
license. Launch 3G services in the same time, is Lee the preparation of financial
levels. When he determined to devote the company's financial strength in
the 3G business, he may have been a few years the number of expected losses, and
accordingly asked real estate, ports, infrastructure construction, such as a few Husky
Energy business will increase profit margins, debt ratio will be reduced to a level of
risk is relatively small: in 2001, the Husky and the yellow energy as a profit
contribution of 900 million Hong Kong dollars, but by 2005 had risen to 3.5 billion,
the same period, profits had remained at a stable range port operations and
infrastructure of the profits of the Yangtze River were turned into 3.9 billion from 2.7
billion and 2.2 billion into 3.4 billion. Even if the huge investment in 3G, but when the
end of June 2006, and the yellow of cash and liquid investments are still 130 billion
Hong Kong dollars.
Investment in recent years in this largest and the slowest return new generation of
global technology, the difficulty faced by far more than anyone could have imagined.
Hutchison's 3G business has just launched, has been suffering from
shortage of mobile phones and other technical difficulties, until 2004, was able to
overcome all the difficulties, together with sections of the fashion phones one after
another, the whole business has been significant progress.
In the development process, and Huang understand that although no single product as
the killer of their ripped market products, but the core competitiveness of 3G is there:
its speed can be smoothly upgraded to connect to any website, phone on more than is
a terminal for the call, but a small computer. While other wireless carriers are also
trying to get users to mobile Internet access, but an invisible barrier that is: operators
want to lock in their users within the wireless gateway, while using a mobile phone
visit other websites are slow. Only to break this deadlock, the user can be happy to use
mobile phones on the information value. Along this line, and the yellow first, and
Yahoo, Skype and other Internet companies, made the first move.
In fact, even the world's largest mobile service operator, also did not do
better than that, and yellow. Although there are steps Vodafone 3G business expansion,
but failed in the competition in Japan and eventually quit, and the company had
acquired German Mannesman damage costs (impairment charge) up to 23 billion to
28 billion pounds, which is allowed since 2005 Since no longer glory days: its to
March 31, 2006 financial reported net loss of Vodafone 23 billion pounds - because of
Hutchison has multiple business and support each other, can still be maintained over
the past few years, billions of dollar profits.
Instead, and yellow with a patient and sustained improvement of access to more
results: to August 2006, the global 3G subscribers reached 13.5 million, the
world's largest 3G business operators. Over the past six months, active
users of ARPU (average revenue per user) rose to 44.66 euros from 42.2 euros, rather
than the telephone business as a percentage of revenue share from 25% to 28%,
development costs for each customer (customer acquisition costs ) decreased from
293 euros to 262 euros.

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