China mogul loses US$27 billion in world’s biggest wealth drop

·3 min read
(PHOTO: Bloomberg)
Colin Huang, the founder of Chinese e-commerce platform Pinduoduo Inc., has lost more wealth this year than anyone else in the world. (PHOTO: Bloomberg)

By Venus Feng

(Bloomberg) — Colin Huang, the founder of Chinese e-commerce platform Pinduoduo Inc., has lost more wealth this year than anyone else in the world.

Huang’s fortune has dropped by more than US$27 billion, according to the Bloomberg Billionaires Index, after the company’s stock plunged as China cracked down on its internet giants. That’s the biggest decline among the 500 members of the index, much larger even than the roughly US$16 billion lost by China Evergrande Group Chairman Hui Ka Yan, whose real estate empire is struggling under a pile of debt.

It’s the starkest example of how the tide has turned for China’s billionaire class as President Xi Jinping calls for “common prosperity” and reins in the country’s private-sector companies. Shares of Pinduoduo, or PDD, have fallen more this year than either Alibaba Group Holding Ltd. or Tencent Holdings Ltd.

PDD is “more vulnerable to the crackdown compared to those peers with mature and profitable models” like Alibaba and Tencent, said Kenny Ng, a securities strategist at Everbright Sun Hung Kai Co. in Hong Kong. “That’s the main reason for the stock performance lagging behind other tech companies.”

A representative for PDD didn’t respond to requests for comment.

Pinduoduo’s American depositary receipts have dropped 44% this year, compared with a 33% decline for Alibaba’s ADRs. Tencent’s shares have slid 20% this year in Hong Kong.

Huang, who owns 28% of PDD, founded the company in 2015 and quickly built it into an e-commerce giant by pioneering community buying. PDD’s annual active users climbed to 788 million in December, exceeding the 779 million users at Alibaba’s online marketplaces.

The company’s market value reached a peak of US$178 billion before falling to about US$125 billion. It reported its first quarterly net profit as a public company last month.

(Source: Bloomberg)
(Source: Bloomberg)

Huang, who’s now worth about US$35 billion, quit his role as chief executive officer last year and stepped down as chairman in March.

PDD is among the tech giants that have been pledging current and future corporate profits to invest in philanthropy projects amid President Xi’s campaign to close China’s wealth gap. It said last month it would allocate US$1.5 billion in earnings to help the development of agriculture in the country. Before that, Huang and PDD’s founding team also gave US$2.4 billion in the company’s shares to a charitable trust last year.

Of the 10 billionaires with the biggest net worth declines this year, six are from China, according to the Bloomberg index. They include Zhong Shanshan, the chairman of bottled water company Nongfu Spring Co., who has lost US$18 billion, Hui of the besieged developer Evergrande, and Tencent’s Pony Ma, whose fortune has dropped by more than US$10 billion.

Apart from those six, Jack Ma, the co-founder of Alibaba, has shed $6.9 billion in wealth this year.

©2021 Bloomberg L.P.

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