Two New China Billionaires Emerge With Shenzhen Stock Rally

A rally in shares on China’s Shenzhen Stock Exchange has made Xiao Fen and Ruan Hongxian billionaires as their companies’ stocks climbed.

Xiao, chairman of Shenzhen Fenda Technology Co., a consumer electronics company that invested in a maker of Google Glass-like products, has a net worth exceeding $1 billion as the stock surged to a record. Ruan, who owns China’s third-biggest publicly traded drug-store chain, also has a fortune of more than $1 billion, according to the Bloomberg Billionaires Index.

The Shenzhen Stock Exchange Composite Index, which tracks shares on the smaller of China’s two stock exchanges, has jumped 8.7 percent this year, making it the best performer in Asia after Indian equity markets. Xiao’s Fenda Technology has surged 49 percent since the start of the year, while Ruan’s Yunnan Hongxiang Yixintang Pharmaceutical Co. added 19 percent.

“Investor confidence in the Chinese market has improved,” said Wang Weijun, a strategist at Zheshang Securities Co. in Shanghai. “That has led to improved liquidity in the Shenzhen Stock Exchange.”

The Shenzhen index dropped 0.7 percent at the close, reversing a gain of 0.3 percent. Ruan’s stock jumped to an 11-week high, while Xiao’s company extended gains to a record.

Xiao, 52, controls more than half of Fenda Technology along with his wife and daughter, according to exchange filings. The stock, which jumped by the daily limit of 10 percent yesterday, added 3.5 percent to 40.71 yuan at the Shenzhen close.

“Being on a rich list only reflects paper wealth,” Zhou Guiqing, a securities representative at Fenda Technologies, said on behalf of the billionaire, describing him as “thrifty.” “His mission is to develop the business well.”

Technology Rebound

Fenda Technology shares are recovering from a 15 percent drop in the fourth quarter, its worst three-month performance.

“The rally in the overall market has boosted technology stocks, which have dropped a lot in the second half of last year,” said Kyle Qin, a Hong Kong-based technology analyst at First Shanghai Securities. “This rebound in tech stocks is expected.”

The bulk of Xiao’s net worth comes from the 52 percent stake he owns with his wife and daughter, while his cash is based on an analysis of dividends, insider transactions, asset sales and taxes.

In February 2014, Fenda Technology said it bought a 20 percent stake in Beijing-based Alto Tech, which earlier this month introduced Cool Glass ONE, the product similar to Google Inc.’s technology eyewear, according to its website.

Ruan, 50, and his wife also control about 52 percent of Kunming-based Hongxiang Yixintang, according to exchange filings. He became a billionaire as the stock jumped 6.6 percent to 49.03 yuan at the close in Shenzhen.

Hongxiang Yixintang’s executives answering the main line declined to transfer the call to Ruan for a comment on his net worth.

The company, which is a retailer and wholesaler of both Chinese and Western medicine, was started by Ruan as a traditional herbal medicine shop in 1981 in Yunnan, a southwestern province, according to the company’s website.

Ruan stepped down as the company’s president earlier this month to focus on his role as the chairman, he said in his resignation letter.

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