Shui On Land founder Vincent Lo Hong-sui’s daughter is stepping onto the developer’s board, a move seen as paving the way for the 70-year-old chairman to retire and name her as his successor to run the HK$15.23 billion business empire.
The board of directors of Shui On Land on Monday appointed Stephanie Lo Bo-yue, 35, as executive director effective from Monday, according to the company’s filing to the Hong Kong stock exchange. It came six years after she joined the group.
Ms. Lo, who has more than 14 years of experience in property development in mainland China, is also executive director of Shui On Management (SOM) and the vice-chairman of China Xintiandi (CXTD). Both SOM and CXTD are subsidiaries.
She holds a bachelor of arts degree in architecture from Wellesley College in Massachusetts and worked for various architecture and design firms in New York, including Studio Sofield that is well-known for its retail design. She overseas market positioning and strategy for Shui On Land projects, and assists the chairman in leading the overall development of the group.
“It is an obvious act for Vincent Lo to pick his daughter as his successor,” said Alvin Cheung Chi-wai, associate director at Prudential Brokerage.
Cheung said it was positive for chairmen of listed companies to name their successors while they are still healthy.
Tang Sing-hing, chief executive of China Hong Kong Capital Asset Management, said it is important in family empires to get succession plans under way early.
“The earlier the better, as it take years for a smooth transition to the second generation,’ he said.
However, Vincent Lo emphasised his daughter still must prove herself.
“Whether Stephanie becomes a successor or not depends on her will. I’m not sure,” said Lo, who holds a 57.3 per cent stake in Shui On Land and is the mastermind of Shanghai’s Xintiandi, a glitzy dining and entertainment complex that draws foreign and local tourists.
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Although Lo has controlling shareholding at Shui On Land, he said he really hopes to have professional management.
“I talked to Stephanie and my son about that very clearly. We are striving for that: professional management. This is not going to change. People say ‘wealth can’t sustain for more than three generations. But I don’t want it to happen to my family … [particularly after] observing my family’s changes and struggles.’”
Ms. Lo is entitled to an annual pay of HK$3.6 million, the statement said.
Her father said he hadn’t pushed for her to go on the board this year.
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“Stephanie is having her first day officially as a board member. I did not strive for that,” he said. “At the beginning of the year, when she presented the company’s businesses, other board members were impressed and asked me if we could invite her to join the board. I have [set] very high standards for my children so I’ve been asking to delay [the joining].”
The announcement came after the firm reported a 43.7 per cent increase in core earnings for the six months ended June from a year earlier due to large gain from asset disposal.
Underlying profit, excluding revaluation gains on investment properties, amounted to 2.14 billion yuan (US$313.6 million), up from 1.25 billion yuan.
Shui On Land said turnover surged 87 per cent to 19.03 billion yuan in the first half of the year, boosted by a 14.88 billion yuan asset disposal, including a residential lot in Shanghai.
Net profit, including revaluation gains on investment properties, jumped 36.4 per cent to 1.23 billion yuan.
An interim dividend of 3.6 HK cents per share was proposed, up from 3 HK cents a year ago.
Shares of Shui On Land rose 2.72 per cent to close at HK$1.89 on Monday.
