Putting down roots, empire building key for entrepreneur
For 14 years, the DHL/SCMP Hong Kong Business Awards have recognised excellence under the categories: Business Person of the Year, Executive Award, Owner-Operator Award, Young Entrepreneur Award, International Award and Enterprise Award. Before the presentation for this year's winners on December 2, every Monday we will speak to one of last year's winners and see how each has fared in the past 12 months.
Strategic Financial Relations has been expanding since managing director Richard Tsang won last year's Young Entrepreneur Award but the firm faces greater competition in the year ahead.
In the past year Strategic - which specialises in providing public relations (PR) and investor relations services to listed firms and initial public offering candidates - has seen its retainer clients jump more than 10 per cent to more than 110. Business growth has been helped by the stream of mainland firms seeking to list in Hong Kong and the rebound in the economy.
However, the more buoyant business climate has led more overseas PR firms such as Citigate and Weber Shandwick to boost their financial relations arms which compete directly with Strategic, according to Mr Tsang, 38.
'In the past five years I would say the total IPOs handled by these ... international names in Hong Kong are less than I handle now. But they are coming back,' he said.
Strategic - which Mr Tsang set up in 1995 after leaving PR agency Edelman - handled 28 of last year's 73 IPOs.
However, there could be gains from the extra competition which might push up rates and raise standards in the local industry.
'I would rather have competition from these serious players, compete with quality of service and everyone can demand a higher price,' he said. '[But] in the past few years local players competed with us on price.'
Mr Tsang also sees scope for the industry to grow as he estimates only 25 per cent of listed companies in Hong Kong retain a financial relations firm to communicate with investors and the media.
Strategic has signed up six retainer clients for a marketing subsidiary started in March to help firms with branding in China. 'It is still quite minimal compared to our financial business but I can say it is a very good start,' Mr Tsang said.
Like many Hong Kong businesses, Strategic hopes to expand in the mainland. The firm has a wholly owned subsidiary in Guangzhou - which deals mainly with the branding business - and a joint venture with offices in Beijing and Shanghai that concentrates on providing public relations for technology companies such as Intel and Apple.
About 30 staff work in Beijing but only four or five in Shanghai, despite being widely seen as China's financial capital, according to Mr Tsang. Strategic puts more emphasis on Beijing as a starting point for overseas clients who want to sell across the mainland due to the regulatory issues.
'But if you want to plant your roots there, you want to start building an empire, or building a corporation there the first place you have to go is Beijing. You need to follow all the government arrangements.'
The company could promote A-share listings but there is little need. 'The situation is that whenever you have an A-share IPO people are fighting to get the shares so why bother to do PR,' he said.
Mainland investors are believed to be keen to buy overseas stock but government rules prevent them. 'I could bring them to China to do roadshows, introduce them to the local investors and so on but I can't do it now because it is not legal,' he said.
Mr Tsang wants China to launch the long-awaited qualified domestic institutional investor scheme that would allow some fund managers to buy overseas stock.
In fact, Mr Tsang prefers the scheme to one where all investors are allowed to buy Hong Kong stock as it would be more manageable for Strategic. Keeping a few hundred qualified fund managers informed about a client would be much easier than communicating with millions of investors scattered throughout the country.
Mr Tsang is eyeing Taiwan and Singapore as new office locations.
'Hopefully, we will be the first Hong Kong/Chinese real PR network in Asia. That's our vision,' he said.
