(Ecofin Agency) - Billionaire Jack Ma who founded the e-commerce platform Alibaba has just been displaced as the richest man in China by a bottled water vendor who goes by the name Zhong Shanshan (pictured).
His company Nongfu Spring, in which he holds a fifth share, is China's leading water seller with a 21% market share. The company also sells tea.
Recently, the company opened its capital and made an IPO on the Hong Kong stock exchange. The operation was highly successful. For a financing requirement of $1.1 billion, Nongfu received offers for nearly $150 billion from investors. Within a few days, the company's value jumped by 80%, also boosting the fortune of its founder and manager.
Shanshan is also head of Wantai Biological Pharmacy Enterprise Co, a company listed on the Shanghai Stock Exchange which manufactures vaccines against certain forms of hepatitis, as well as highly fashionable covid-19 test kits.
Shanshan's new status as China's richest man is temporary because it is linked to the stock market performance of its companies. Nongfu is now considered overvalued. Its price-to-earnings ratio is currently 70. This means that if an investor acquires the shares of this company today, he will have to wait 70 years to recover the stake.
This is too long for individual investors. If financial performance does not follow, we could see a drop in the share price.
In the meantime, Jack Ma is preparing an IPO for a company called Ant Group in which he holds 9% of the share. The operation could value the company at $300 billion.