Zhong Sheng Jian

Singapore - Zhong Sheng Jian has made his fortune selling apartments to Chinese yuppies, thanks, in part, to the humble kitchen sink.

Zhong's firm, Yanlord Land Group, has caught the eye of foreign investors because it is one of the better-known names among sophisticated Chinese home-buyers, analysts said.

In a country where home ownership only took off in the last decade and where most new homes are sold as bare concrete boxes, Yanlord was one of the first to sell flats with fittings such as kitchen sinks and built-in cabinets.

Since its Singapore listing in June, Yanlord has doubled in market value to over S$4 billion ($2.6 billion), helped by a tie-up with Singapore's giant state investment agency.

The listing and partnership have catapulted Yanlord's founder and chief executive, a 48-year-old former factory worker from Guangdong province, into the ranks of China's richest men.

Forbes magazine named Zhong China's 14th-richest person with about US$1.1 billion. That puts him behind Huang Guangyu of GOME Electrical Appliances, the wealthiest, with US$2.3 billion, and property tycoons Xu Rongmao of Shimao Property and Zhu Mengyi of Hopson Development

Yanlord is among the handful of developers in China to post strong earnings growth despite Beijing's efforts to curb speculation through higher interest rates.

The firm tripled its net profit to S$123.1 million in the first nine months of 2006 from a year ago, as analysts say Yanlord's middle-class Chinese customers in cities such as Shanghai, Chengdu and Nanjing, rely less on bank loans.

"Yanlord occupies a niche in the housing market - near the high end where there are not many competitors," said Danny Bao, CLSA senior investment analyst.

Its Shanghai apartments sell for 15,000-30,000 yuan per square metre or 4 million yuan ($510,900) for a three-bedroom flat, against 20,000-40,000 yuan per square metre for rivals Shimao Property Holdings and Shanghai Real Estate

Few Early Believers

Analysts say Yanlord's partnership with the Government of Singapore Investment Corp. (GIC), which runs over $100 billion of the nation's reserves, should further boost its profile.

"There weren't that many believers when the company listed," said Peter Chiang, a fund manager at DBS Asset Management who invested at the time of Yanlord's initial public offering in June, even though the deal was cut twice due to poor demand.

Yanlord shares have risen 35 percent since November when it said it had set up a 60-40 joint venture with GIC to invest in China. Last month, the partners announced a $308 million investment in a commercial and residential site in Nanjing.

GIC, which has also tied up with Chinese developers such as China Vanke Co. Ltd. and Beijing Capital Land among its over 150 property investments worldwide, said the venture would expand in China's fastest-growing cities.

Spectacular economic growth has spurred demand for private housing in China, which is almost as big in size as the United States but with four times the population.

Yanlord's shares, which closed at S$2.50 on Wednesday, trade at an estimated price-to-earnings (PE) ratio of 22 times compared to Shimao's 23 times and Shanghai Real Estate's 12 times.

Singapore Links

Yanlord's rise will cast a spotlight on the low-profile Zhong, who has Singapore citizenship but divides his time between the city-state, Hong Kong and Shanghai.

When China's free-market reforms began in the early 1980s, Zhong traded machine parts, then moved into making bottle caps.

He turned to property after China decided in 1988 to allow home ownership, and launched his first residential project in Shanghai in 1993, a year after Chinese urban dwellers began buying their homes from the government.

Yanlord -- which means perseverance and benevolence in Mandarin -- is the first asset to be listed from Zhong's empire, which includes garment and cigarette-paper manufacturing.

Zhong and his family settled in Singapore in 1988, drawn by its high living standards, business associates said.

Today, Zhong, who has no tertiary education, speaks mainly Cantonese and Mandarin, forcing him to turn to translators as he meets more investors, analysts and bankers.

Zhong, an honorary business advisor to the Singapore government on China, has capitalised on his Singapore links in his branding: In China, Yanlord's billboards describe it as a Singapore firm even though it has no properties there.

"Chinese consumers think of it as a high-profile company with overseas origins though they don't necessarily know it is connected to Singapore," said David Chen, who markets residential projects in Shanghai for CB Richard Ellis.