A former labourer briefly overtakes Jack Ma as China's richest person

 Until last week, the world had known tech titan Jack Ma as China's wealthiest person. That changed on Wednesday (Sept 23) when a former journalist and mushroom farmer from Zhejiang overtook the Alibaba e-commerce platform founder to become the top billionaire - though briefly - in the country of 1.4 billion.

While all eyes are currently on Alibaba Group Holding Ltd. founder Jack Ma, who is set for a windfall from the potential US$35 billion Ant Group Co. Ltd. IPO in the coming weeks, a bottled water tycoon little known outside the mainland briefly dethroned him as China's richest person on Sept. 23.

Since its Sept. 8 listing in Hong Kong, shares of Nongfu Spring Co. Ltd. jumped 83% as of Sept. 23, propelling the net worth of founder Zhong Shanshan to $58.7 billion, $2 billion more than Jack Ma, according to the Bloomberg Billionaires Index.

Zhong, who owns an 84% stake in Nongfu Spring, has seen his fortune swell by $46.2 billion in 2020 as of Sept. 28 thanks to two public offerings. In April, Zhong's Beijing Wantai Biological Pharmacy Enterprise Co. Ltd., a producer of COVID-19 and HIV diagnostic kits, listed in Shanghai. The shares had gained more than 2,000% as of Sept. 24.

Only Amazon.com Inc.'s Jeff Bezos and Tesla Inc.'s Elon Musk have enjoyed a greater rise in wealth during the year, according to the report. India's Mukesh Ambani, leader of the Reliance Industries Ltd. conglomerate, continues to be Asia's wealthiest individual.

A former reporter who dabbled in various ventures including mushroom farming and treatment for erectile dysfunction using turtle parts, Zhong set up Nongfu Spring in 1996. His reported low profile in the Chinese business circles with no known political affiliation has earned him the nickname "Lone Wolf."

Zhong also stands out for being the only Chinese billionaire not involved in either technology or real estate.

Nongfu Spring has kept its net profit margin above 19% over the past three years and holds a leading position in the packaged drinking water market. This dominance is likely to remain unchallenged as resources for natural drinking water are limited and access requires government permits, according to a consumer research analyst at a Chinese broker speaking on the condition of anonymity.

"It is hard to create a differentiator for drinking water. Nongfu Spring's natural water positioning contributes to its branding, creating an aspirational impact among consumers," the analyst said.

Household consumption of the company's drinking water surged during the pandemic as people stayed home. While the overall bottled water business grew 0.7%, revenue from medium-to-large-sized packaging for household consumption rose 26.2% year over year.

Rising health awareness and a recovery from heavy rainfall in July should help to drive further growth for Nongfu Spring in the second half of the year, Macquarie analysts wrote in a Sept. 25 research note while retaining an "outperform" rating for the stock.

A bottle of Nongfu Spring's packaged water currently retails at 2 yuan, twice the price of rival Master Kong Holdings Co. Ltd. The brand continues to lead the bottled water sector in China through product innovation and channel optimisation, according to Euromonitor.

Nongfu Spring's shares fell a combined 10.6% on Sept. 24 and Sept. 25 as the company withheld its interim dividend and reported a 0.7% drop in profit for the first half of 2020. Revenue declined 6.2% due to a slowdown across all product categories other than bottled water due to the COVID-19 pandemic, notably the tea and functional beverage segments, which together formed nearly a third of sales in the year-ago period.

The share price decline shaved off more than $5 billion from Zhong's net worth, pushing him below Ma, who is ranked 18 on the index. As the second wealthiest Chinese individual, Zhong sits ahead of Tencent Holdings Ltd. founder Pony Ma and Pinduoduo Inc. founder Colin Huang.

As of Sept. 25, US$1 was equivalent to 6.82 Chinese yuan.