Company Overview: Siu Fung Aluminum Engineering Company Ltd.
The raise and collapse of the Siu-Fung is all because of rapid expansion and aggressive strategy.
In the early 1990s, the company went through a period of rapid expansion to acquire more than 30 ceramic factories in China. He re-planed those factories and equipped updated production line, ceramic ovens, and etc. Factories under his project became first class in world ceramic industries.
The action made Siu Fung corner the China, and raise many investors’ interest. At the end of 1993, Siu Fung went public and Siegfried Lee had been praised as Hong Kong’s youngest self-made billionaire. In 1994, Siu Fung took one step further and formed a 660m yuan ceramics tableware company, Siu-Fung Concept.
However, the project was too aggressive and overspending, it is impossible to control and supervise 30 factories and the joint ventures ceramics kingdom in same time.
The group’s financial crisis has dragged several of Siu Fung’s German acquisitions into bankruptcy. While there were still losing money in mainland ventures, In 1996, Siu-Fung further expanded its business through the acquisition of 3 German ceramics manufacturing companies. After the groups announced it was scrapping a plan to spin-off German companies for a separate listing in New York Stock Exchange, a rapid drop on its shares price and the collapse cannot be stopped.
From the history of Siu-Fung, Siegfried Lee is proactive and aggressive business man. Siu-Fung Ceramics was founded when he was 25. It is believed that he had good judgment in investment, and made Siu-Fung groups being listing company.
However, the direction of Siegfried Lee Siu-fung to run a business is too aggressive. Over expanding lead to the group’s bankruptcy. Aggressive may cause him to join the inside dealing when the group announced scrapping the plan to spin-off German companies for separate listing in New York.
From the Financial statement of 1997 and 1998, we can detect the failure of the groups.
a) From the Profit & Loss
In the early 1990s, the company went through a period of rapid expansion to acquire more than 30 ceramic factories in China. He re-planed those factories and equipped updated production line, ceramic ovens, and etc. Factories under his project became first class in world ceramic industries.
The action made Siu Fung corner the China, and raise many investors’ interest. At the end of 1993, Siu Fung went public and Siegfried Lee had been praised as Hong Kong’s youngest self-made billionaire. In 1994, Siu Fung took one step further and formed a 660m yuan ceramics tableware company, Siu-Fung Concept.
However, the project was too aggressive and overspending, it is impossible to control and supervise 30 factories and the joint ventures ceramics kingdom in same time.
The group’s financial crisis has dragged several of Siu Fung’s German acquisitions into bankruptcy. While there were still losing money in mainland ventures, In 1996, Siu-Fung further expanded its business through the acquisition of 3 German ceramics manufacturing companies. After the groups announced it was scrapping a plan to spin-off German companies for a separate listing in New York Stock Exchange, a rapid drop on its shares price and the collapse cannot be stopped.
From the history of Siu-Fung, Siegfried Lee is proactive and aggressive business man. Siu-Fung Ceramics was founded when he was 25. It is believed that he had good judgment in investment, and made Siu-Fung groups being listing company.
However, the direction of Siegfried Lee Siu-fung to run a business is too aggressive. Over expanding lead to the group’s bankruptcy. Aggressive may cause him to join the inside dealing when the group announced scrapping the plan to spin-off German companies for separate listing in New York.
From the Financial statement of 1997 and 1998, we can detect the failure of the groups.
a) From the Profit & Loss