Forbes - Asia (October 2018)

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CONTENTS — OCTOBER 2018 VOLUME 14 NUMBER 8






















































S PAGE 18
12 | FACT & COMMENT // STEVE FORBES
“I NEVER DO The disaster of 2008: why it can happen again.
A BUSINESS INDIA’S 100 RICHEST

DEAL IN WHICH
66 | HISTORICAL ARC
ANYONE LOSES.” A shift in steel technology has a family-run leader in graphite electrodes humming. Even a

—RITHY SEAR, Cambodian tycoon. wary patriarch is making bigger plans.
BY ANURADHA RAGHUNATHAN

70 | THE LIST: A FEW RISE IN A FLAT YEAR
Bufett, broadband and biotech lift some of the lofty.
BY NAAZNEEN KARMALI
82 | BILLIONAIRES LEFT OUT
Three-comma wealth no longer guarantees a spot on the 100.
BY NAAZNEEN KARMALI

COMPANIES, PEOPLE

14 | OUT OF LIMBO
After eight years, the final piece of Pua Seck Guan’s Singapore property project is open.
BY JANE A. PETERSON
18 | DELIVERING THE GOODS
Rithy Sear returned to Cambodia after a four-year odyssey as a refugee and started
an entrepreneurial journey that’s made him one of the country’s top tycoons.
BY DANIELLE KEETON-OLSEN
22 | GET IN THE GAME
Jason Chen has Acer refocused on PCs but aimed at consumers of higher-end hardware.
BY RALPH JENNINGS
24 | KEEP ON KEEPIN’ ON
Adobe continues to reinvent itself as it keeps pace in the crowded software field.
BY PETER CARBONARA

COVER PHOTOGRAPH BY
GRAHAM UDEN FOR FORBES UNLESS OTHERWISE SPECIFIED, ALL TOTALS AND PRICES EXPRESSED IN OUR STORIES ARE IN U.S. DOLLARS.

4 | FORBES ASIA OCTOBER 2018



CONTENTS — OCTOBER 2018 VOLUME 14 NUMBER 8






25 | GADGETMAN // BEN SIN
China’s Lime scooters invade Silicon Valley.

26 | BEST UNDER A BILLION: BIG SWALLOW
Vincent Lin has brought “bioscience design” to a nutricyclicals maker in Taiwan.
BY JOYCE HUANG

30 | SELLER’S REMORSE
WhatsApp cofounder Brian Acton takes perhaps the most expensive moral stand in history.
BY PARMY OLSON
51 | THE MOST VALUABLE NFL TEAMS
Why the U.S. football financial boom has slowed to a crawl.
BY MICHAEL K. OZANIAN, KURT BADENHAUSEN & CHRISTINA SETTIMI
56 | MOM AND POP’S BEST FRIEND
Mailchimp saves small businesses the old-fashioned way: email.
BY ALEX KONRAD

90 | HOT POT HOSPITALITY
Zhang Yong’s Haidilao mushroomed into a Chinese sensation, and suddenly he’s the
world’s richest restaurant magnate.
BY PAMELA AMBLER
U.S. COLLEGES


36 | TOP 25
America’s best based on low debt, high salaries, graduation rates and student satisfaction.
EDITED BY SUSAN ADAMS & CARTER COUDRIET
37 | THE PAPER CHASE
A guide for helping Asian students find U.S. schools that will accommodate financial need.
BY QUANZHI GUO

FORBES LIFE


94 | WHERE TO HANG IN PENANG
A tale in pictures of ambitious Armenian brothers and their elegant legacy.
BY JANE A. PETERSON
96 | THOUGHTS
On India.
S PAGE 66
“WE ARE IN A

VENTURE NOT
AN ADVENTURE.”

—KRISHNA KUMAR BANGUR,
Graphite India chairman and No. 91
on our list of India’s richest.



















X PAGE 26

“WE’RE A GROUP

OF FANATICS.”

—VINCENT LIN, TCI CEO.



6 | FORBES ASIA OCTOBER 2018



FORBES ASIA

SIDELINES






Editor Tim W. Ferguson
Editorial Director Karl Shmavonian
Cold Reality
Art Director Charles Brucaliere
Senior Editor John Koppisch
Wealth Lists Editors Luisa Kroll, Kerry A. Dolan
Statistics Editor Andrea Murphy ive months ago, in a round
Research Director Sue Radlauer of Asian talks, I said the U.S.
Online Editor Jasmine Smith Fand China were in for a long,
Reporter Grace Chung bumpy stretch but not a full trade

Editorial Bureaus war. Half right, I guess.
Beijing Yue Wang Clearly, relations have grown
Shanghai Russell Flannery (Senior Ed.); Maggie Chen stif on multiple fronts. First of, the
India Editor Naazneen Karmali layers of tarifs are sticking rather

Contributing Editors than being feints for negotiating
Bangkok Suzanne Nam advantage. his will gum up global NYC protest: Even blue states see red over China.
Chennai Anuradha Raghunathan commerce even without accompanying acrimony, and be a net loss for the U.S. and
Hong Kong Shu-Ching Jean Chen China, and economies in between.
Melbourne Lucinda Schmidt
But trade parity is far from the only contested ground now. A variety of military,
Perth Tim Treadgold
development and diplomatic rubs have developed, with China’s repressive domestic
Singapore Jane A. Peterson
policies always adding background noise to the clamorous “dialogue.” President Trump
Taipei Joyce Huang
has even taken to the notion that Chinese propaganda is iguring in the election shel-
Vietnam Lan Anh Nguyen
lacking he is due in weeks. For its part, China is replying brusquely down to the level of
Columnist Ben Sin
denying a naval port of call to Hong Kong.
Production Manager Michelle Ciulla
It’s important to realize, however, that Trump’s typical bluster can mask longer-term
shits in bilateral afairs. And here the picture is actually darker still. Unlike the case

with many of the other ights the president has picked, the bout with China—or more
accurately, with the Communist Party of China—is one that broad swaths of American
EDITOR-IN-CHIEF society are ready for.
Steve Forbes here’s a broad U.S. consensus that the PRC government is indisposed to a liberal

order (forget democratic) that underlies a basic rule of law for a civil, transactional
FORBES MAGAZINE
world society. Yes, China has signed treaties (even some the U.S. has snifed at), but it
CHIEF CONTENT OFFICER Randall Lane
has not won over belief in its good intentions. hat this is a both a Democrat as well as
EXECUTIVE EDITOR Michael Noer
ART & DESIGN DIRECTOR Robert Mansield Republican position will be underscored if power in Washington again is divided ater
November.
FORBES DIGITAL
For the rest of Asia, there’s apprehension and perhaps some opportunity to play
VP, INVESTING EDITOR Matt Schifrin
sides. No one can win if actual weapons are deployed, such as in the South China Sea
VP, DIGITAL EDITOR Mark Coatney
VP, PRODUCT DEVELOPMENT Salah Zalatimo or the Taiwan Strait. In a cold war, however, alliances can help. China clumsily goes
VP, WOMEN’S DIGITAL NETWORK Christina Vuleta about seeking them, while the U.S. squandered a sure thing by abandoning the Trans-
ASSISTANT MANAGING EDITORS Paciic Partnership.
Frederick E. Allen LEADERSHIP
If I were asked again, I’d say neither China nor the U.S. can aford a big mistake
Loren Feldman ENTREPRENEURS
Janet Novack WASHINGTON from here—but that doesn’t necessarily preclude one.
Michael K. Ozanian SPORTSMONEY
DEPARTMENT HEADS
Mark Decker, John Dobosz, Clay Thurmond
Jessica Bohrer VP, EDITORIAL COUNSEL
FOUNDED IN 1917
B.C. Forbes, Editor-in-Chief (1917 54)
Malcolm S. Forbes, Editor-in-Chief (1954 90) Tim Ferguson
James W. Michaels, Editor (1961 99) SETH WENIG/AP PHOTO
William Baldwin, Editor (1999 2010) Editor, forbes as
a
[email protected]




8 | FORBES ASIA OCTOBER 2018



FORBES ASIA

READERS SAY






CEO/ASIA, FORBES MEDIA CONVERSATION
William Adamopoulos
SENIOR VICE PRESIDENT Tina Wee OUR STORY about the i erce
EXECUTIVE DIRECTOR-CONTENT Justin Doebele competition in the co-working,
EXECUTIVE DIRECTORS Eugene Wong, Aarin Chan,


Janelle Kuah, James Sundram oice-space market in China,
SALES DIRECTORS Lindsay Williams, Michelle Ong featuring Chinese startup Kr
DIRECTOR, CIRCULATION Eunice Soo Space versus WeWork (“Seats,
DEPUTY DIRECTOR, EVENTS & COMMUNICATIONS h en Services,” September, p. 18),
Audra Ruyters
DEPUTY DIRECTOR, CONFERENCES Jolynn Chua provoked speculation on Twitter
DEPUTY DIRECTOR, CIRCULATION Pavan Kumar from @gordonorr: “Will WeWork

DEPUTY DIRECTOR, MARKETING & RESEARCH Joan Low sufer the same fate as Uber in
SENIOR MANAGER, CONFERENCES Quek Xue Wei China? Intense price-based local
SENIOR MANAGER, EVENTS & COMMUNICATIONS Melissa Ng
competition driving them out?
SENIOR MANAGER, MARKETING & RESEARCH Chow Sin Yee
SENIOR MANAGER, AD SERVICES-DIGITAL Keiko Wong Or will their market segment cre-
OFFICE MANAGER/ASSISTANT TO THE CEO/ASIA ate a large enough group willing
Jennifer Chung to pay a premium for the WeWork
AD SERVICES MANAGER Fiona Carvalho solution?” Volatility roiled our an-
CONFERENCE MANAGERS Clarabelle Chaw, Cherie Wong
nual roster of the Philippines’ 50
ASSISTANT MANAGER, MARKETING & RESEARCH
Gwynneth Chan Richest (p. 84), prompting Malaya
ADVERTISING EXECUTIVES Business Insight Online to crypti-
Angelia Ang, Sharon Joseph, Sabrina Cheung cally quip “Crazy rich Filipinos”
CIRCULATION SERVICES on Facebook, in honor of a recent
Taynmoli Karuppiah Sannassy, Jennifer Yim
smash-hit movie. he workout regimen of triathlete Wilfred Steven Uytengsu Jr.

(No. 38 on the Philippine 50 List) earned this healthy tweet from @SWIMBIK-
ERUNph: “IRONMAN Triathlon in the Philippines is in good hands.”
FORBES MEDIA
CHIEF EXECUTIVE OFFICER Michael Federle
CHIEF FINANCIAL OFFICER Michael York THE INTEREST GRAPH
CHIEF REVENUE OFFICER Mark Howard
EDITOR-AT-LARGE/GLOBAL FUTURIST Rich Karlgaard The Philippines and the crypto/blockchain phenomenon grabbed our readers this time:
GENERAL COUNSEL MariaRosa Cartolano
Philippines’ Richest: Real Estate Tycoons Post Gains Amid Declines for Most Others 60,319 page views
PRESIDENT, FORBESWOMAN Moira Forbes
October 2018
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FACT & COMMENT


“With all thy getting, get understanding”







THE DISASTER OF 2008


WHY IT CAN HAPPEN AGAIN



BY STEVE FORBES, EDITOR-IN-CHIEF





COUNTLESS COMMENTARIES and looned from under $300 an ounce to a
articles are marking the tenth anniversary peak of $1,900. When money becomes
of the panic of 2008. Yet almost all ignore unreliable, people turn to hard assets. he
the root cause of the crisis: a weak dollar. most dramatic, destructive example of
A wobbly, volatile currency always begets that process was in the housing market.
economic upheavals. If we don’t grasp that To one degree or another, other currencies
fundamental lesson, we will inevitably get followed the dollar’s bad example. hus,
into trouble again, big time, in the future. the artiicial housing expansion—and
Moreover, these retrospectives overlook bust—became a worldwide occurrence.
or downplay two other major blunders by r 8BTIJOHUPO T JODPOTJTUFODZ CSJOHT PO
the federal government. Here are the three. êOBODJBM NBSLFU QBSBMZTJT he inevi-
r %BNBHJOH UIF EPMMBS Precipitated by the table reckoning turned into a panic that
popping of the high-tech bubble, the economy weakened in nearly brought the inancial system into catastrophic car-
2000 and went into a formal recession the following year. In diac arrest. In the spring of 2008 Wall Street’s ith-largest
response, the Federal Reserve started to cut interest rates. investment bank collapsed, loaded with junk mortgages
hen it and the Treasury Department (which by law is in and other questionable assets. Bear Stearns was hardly a
charge of the dollar) began to undermine the value of the linchpin institution, yet the Bush administration decided
greenback. to bail out the irm’s creditors. he two politically power-
hat was a catastrophic mistake. he theory behind this ful and recklessly run government-sponsored enterprises,
move was that a gradual devaluation of the dollar would Fannie Mae and Freddie Mac, which were bulked up
boost exports, which would help stimulate the economy. with subprime mortgages, teetered during that summer.
hat theory is nonsense: Countries with unstable currencies Washington came to their rescue. hen Washington let
always, over time, roundly underperform those with sound Lehman Brothers, a far larger and more important institu-
currencies. Compare Switzerland, which has had the best- tion than Bear Stearns, fail. “No more bailouts!” was the
managed currency over the past 100 years, with Argentina, message. And then the irst money market ever created,
which has had one of the worst. Switzerland has expanded having become overly aggressive, was hit with losses. A
impressively, while Argentina has stagnated, even though it run on money market funds, which had over $2 trillion
was once a global economic powerhouse. in assets, ensued. Simultaneously, AIG, the world’s largest
he reason for such a dramatic divergence is simple. commercial insurance company, needed a huge infusion of
Progress depends on investing, and productive investing emergency cash.
is aided immeasurably when money’s value is stable, just Panic erupted as everyone clutched cash in desperation.
as markets operate far more eiciently and fruitfully when Washington reversed course again, granting federal guar-
there are ixed weights and measures for commodities. antees for money market funds and bailouts for selected
For example, the amount of liquid that constitutes a gallon banks. AIG and Citigroup were, in efect, nationalized.
doesn’t luctuate. Money measures value the way a yardstick r "O BDDPVOUJOH SVMF CFDBNF B XFBQPO PG NBTT EF-
measures length. TUSVDUJPO In 2007 regulators resurrected an accounting
Funny money distorts prices, which are the absolutely rule, dubbed “mark-to-market accounting,” that had been
crucial conveyors of information—supply and demand—that abolished during the Great Depression. Its efect was to con-
enables free markets to function. Like a virus in a com- stantly and relentlessly artiicially depress the value of bank
puter, a distorted currency corrupts the information. As the capital at a time when these institutions were in precarious
greenback was gradually gutted, commodity prices soared. condition.
Oil gushed from $20 to $25 a barrel to over $100. Gold bal- he Bush administration was obstinately oblivious to the




12 | FORBES ASIA OCTOBER 2018

perniciousness of this decree. Fi-
nally, in early March 2009, thanks
to the eforts of a handful of en-
lightened individuals, the House of
Representatives held a hearing that
made it sharply clear that this edict
had to go. Regulators got the mes-
sage and efectively defanged the
destructive rule that was threaten-
ing the very existence of our bank-
ing system. hat put an abrupt end
to the terrible bear market that had
battered equity averages by almost
60%. he subsequent bull market
has gone on to this day.
his whole sorry episode
underscores an underappreci-
ated truism: Governments, not
free markets, cause economic The end: Lehman Brothers, 2008.
calamities.



The Big, Bad Cost to expand its inluence regionally and glob- incisive insights on how to proitably
ally. Spending on military forces and R&D
navigate emerging energy and com-
of 2008 is rapidly growing. Beijing is determined to puter technologies; you will learn from
be the master of cyberwarfare. Jon Markman about the seven compa-
Perhaps the most toxic fallout from he liberal post-WWII order of nies whose shares have the most to gain
2008–09 was not economic but rather American-led military security and from stunning developments in robot-
geopolitical. It severely damaged faith growing trade is under stress. ics, self-driving cars, artiicial intel-
in free markets in much of the world— Of course, a sustained Reaganesque ligence and the cloud; John Mousseau
most ominously in Beijing—even though economic and military revival at home will answer critical questions concern-
government folly brought on the crisis. and wise peace-through-strength poli- ing the impact the tax bill will have on
Policy errors that subsequently stunted cies overseas could right matters again, municipal bonds and other ixed-in-
U.S. growth for nearly a decade reinforced as they did once before. come securities; Ric Gregoria will share
the perception in China, Russia, Iran and not-to-be-missed tax approaches to
North Korea that the U.S. was a declin- wills, trusts and estates (especially estate
ing power, and they acted accordingly. It Making Money business planning and succession); ever
will take a few years of good, solid growth While Having Fun insightful investment strategist Sam
in America to put an end to this kind of Stovall will show you how to handle the
deluded—and dangerous—thinking. No need to sufer the wintertime blues! notorious “Republican curse,” which is
Whatever diferences it had with the Instead, broaden your horizons and that every GOP president since Teddy
U.S., China believed Americans under- enrich your portfolio by joining us Roosevelt has been hit with a recession
stood money and inance. he disillu- January 24 to February 3, 2019, for a during his irst term; and you’ll hear
sionment triggered by the crisis quickly fantastic Forbes Cruise for Investors from Ned Davis, whose research and
set in motion a resurgence of Chinese from Rio de Janeiro to Buenos Aires. proprietary approaches to evaluating
government intervention in the economy he voyage combines exhilarating shore various metrics have made him a much-
that goes on to this day. Violations of excursions with scintillating investment sought-ater advisor to asset and wealth
international trading rules that Beijing seminars at sea, given by our team of managers.
had agreed to honor proliferated. Forced remarkable stock market mavens and You will be hosted by Forbes’ es-
transfers of know-how and trade secrets ixed-income experts. teemed editor-at-large and global futur-
from foreign companies to Chinese ones Among the highlights: You’ll get ist, Rich Karlgaard. You have nothing
mushroomed, as did involuntary merg- moneymaking advice on dividends to lose except an exciting cultural and
ers with domestic entities. and value equities from John Buck- inancial opportunity!
Disturbingly, China has chucked out ingham, who’s been dubbed by Fox To reserve your place, go online
the cautious foreign policy that had been in Business News as “he Bufett Beater”; to cruises.moneyshow.com/the-31st-
place since 1978. It is aggressively working the legendary Mark Mills will give forbes-cruise-for-investors. F
ORJAN F. ELLINGVAG/CORBIS VIA GETTY IMAGES


OCTOBER 2018 FORBES ASIA | 13

FORBES ASIA
PERENNIAL GEM




















































OUT OF





LIMBO






After eight years and a big

court battle, the inal piece of

Pua Seck Guan’s landmark Singapore

property project is now open. Lost the battle, won the hotel: Pua lost his
court fight with fellow tycoon Kwee Liong
Seen, but ended up with the Kempinski.
BY JANE A. PETERSON

or nearly three years it’s been an odd sight in Singa- task ahead: to turn his project on Stamford Road—which in-
pore’s Civic District. he centerpiece of the $800 mil- cludes the iconic Capitol heatre, the vast Capitol Piazza shop-
lion Capitol development project—two colonial land- ping center and a ten-story, newly built condominium tower—
marks transformed into a luxury hotel—appeared into a moneymaker.
Fto be inished, but then didn’t open. No limousines For now, Pua is happy that the Capitol Kempinski Hotel Sin-
dropping of dignitaries. No Michelin-starred chefs whipping gapore is at long last receiving guests. “It could be better than
up extravagant meals. No wealthy visitors loaded down with Ra es,” he says, “his is the top of the ive-star category, not an
shopping bags. ordinary ive-star.” More than 15 chains bid for the management
his month the opulent, 157-room hotel inally opened, contract, but Pua and his partners liked Kempinski, Europe’s
under the Switzerland-based Kempinski brand. It’s the end of a oldest luxury brand, because it focuses solely on luxury, avoid-
bruising battle that pitted two of Singapore’s top real estate ty- ing the distraction of three- and four-star venues. It’s private-
coons against each other before culminating in a drawn-out ly held Kempinski’s irst hotel in the city as it expands in Asia,
court case. Despite losing in court, Pua Seck Guan and his Pe- joining Kempinski hotels in Bangkok and Jakarta; Bali follows
rennial Real Estate Holdings emerged with full control. he next year and Kuala Lumpur in 2020.




14 | FORBES ASIA OCTOBER 2018

Kempinski signed up only in May, and it began taking book- porcelain-and-glass producer Daum-Haviland and German ta-
ings just in August, so the opening has been somewhat sot. Pe- bleware-maker Villeroy & Boch. But the languishing Galleria
rennial says it spent $8 million on ixtures, ittings, equipment promenade is not quite so upmarket. On an August aternoon
and supplies for the empty hotel to get it ready in time. But the two lone patrons sit under indoor palm trees outside the 1933
company has tempered expectations, noting that the hotel’s full by Toast Box café, where a signboard promotes an inexpensive
range of services, including the food-and-beverage oferings, “Tok Gong” combo of chili crab dip with toast sticks. It seems a
will arrive in phases. he promised Michelin-caliber chef won’t far cry from the scene that the hotel chain described in its press
be announced until later in the year. In mid-September Kem- release in May—a promenade that includes “an array of quintes-
pinski’s marketing department said there had been a “steady sentially Kempinski gastronomic delights.”
pick-up in reservations and inquiries” and was expecting more At the luxury condominium building, Eden Residences
interest once the hotel is up and running. Capitol, only 16 of the 39 units have sold. he last one closed for
A weak link in the Capitol development project is the Capi- $7.5 million—in 2015.
tol Piazza, which opened in 2015. It includes the high-end shops Meanwhile, the 89-year-old Capitol heatre, which got a
on the cross street, North Bridge Road: Cortina Watch, French $45 million refurbishment, also opened in 2015. It had been




OCTOBER 2018 FORBES ASIA | 15

FORBES ASIA
PERENNIAL GEM




its start just the year before. She says the
ledging outit had participated in the
process mostly to get experience with
government tenders, this being only its
third project. Pua was overseas when his
staf gathered to check the winner. “We
kept looking at the screen. Is it us? Is it
us?” she says. “We didn’t expect to win.”
In 2012 Sukmawati sold her stake to
Osim International founder and billion-
aire Ron Sim, now Perennial’s vice chair-
man, and Pontiac Land ailiate Chesham
Properties. With Perennial and Chesh-
am now each owning half of the project,
the stage was set for conlict between Pua
and Kwee. Pua winces when asked about
the feud, which began the next year, ac-
cording to reports. “We tried very hard,
and despite various people trying to help,
we had a fundamental deadlock,” he says.
heir dispute involved “a number of key
issues,” which included expenses and
when to sign a joint-venture agreement,
according to court records. Pua declines
to discuss the details on the record.
In 2016 Perennial went to court, ask-
ing a judge to wind up their three asso-
ciated companies. While the judge ac-
knowledged that a “loss of mutual trust”
had “straitjacketed” the project, the court
rejected the request and then also the ap-
peal, citing an agreement that allowed
one party to sell its shares to the other at
“We are glad we ended up owning the entire project. It’s a flagship for us”: Pua Seck Guan.
the fair-market value. “We were stuck,”
dormant for more than a decade. Aim- tion School. says Pua, relecting on the court’s deci-
ing to be the location of choice for glitzy Over tea and cakes in the hotel’s lobby sion in February.
events, the 977-seat theater screened lounge before the opening, Pua casts his Pua went back to Kwee with an ofer
Crazy Rich Asians in August, rolling out eyes around the 114-year-old building he had made once before: Buy Perenni-
its red carpet for the ilm’s stars, direc- that was once Stamford House, one of the al’s 50% stake for $400 million. “hey de-
tor and producer. Inside, a ceiling center- island’s early department stores. He recalls cided they did not want to, so we bought
piece includes an intricate golden zodi- how in 2010, he and the two other mem- [Chesham’s stake] at the same price and
ac, while the $10 million loor can rotate bers of a consortium—Singapore tycoon the same terms,” he says. he deal was
to whisk away 500 seats and create a ball- Kwee Liong Seen and his Pontiac Land signed in March. “We are very glad we
room. But Perennial declines to answer Group, and Sukmawati Widjaja, daugh- ended up owning the entire project. It’s
whether the theater is turning a proit. ter of Indonesian tycoon Eka Tjipta Wi- a lagship for us.” Kwee declines to com-
Pua acknowledges the headwinds, djaja, and her property irm Top Global— ment, referring all questions to Perennial.
noting that he needs to overhaul the Cap- mounted the winning, $190 million bid At 54, Pua seems to be a local boy
itol Piazza, replacing a number of the against 14 rivals for the government prop- wonder. Not only is he Perennial’s CEO,
mid-scale shops and cafés with higher- erty. Pua contributed his expertise in re- he’s also chief operating oicer and ex-
class ones. “We will attract more and bet- tail, Kwee in hotels and Sukmawati in res- ecutive director of commodities power-
ter tenants,” he says. Also on the agenda: idential. “We put up a good scheme,” says house Wilmar International and a non- CAROLINE CHIA/THE STRAITS TIMES/NEWSCOM
integrating the staf at the Capitol and Pe- Pua. “We didn’t stinge on a single cent.” executive director of Singapore-based
rennial’s nearby Chijmes retail develop- For Perennial, the win came as a United Engineers. Apart from earn-
ment, which was formerly the Convent shock, according to Deputy Chief Exec- ing a master’s degree in civil engineering
of the Holy Infant Jesus Middle Educa- utive Annie Lee, who joined the irm at at the Massachusetts Institute of Tech-




16 | FORBES ASIA OCTOBER 2018

nology and doing a stint in India with large number of restaurants. ecuted, it would provide a much more
engineering irm DLF, he has spent his he purchase of half of the Capitol holistic shopping experience to cater to
life in Singapore, building his reputa- project, as well as lower gains in China, a wider range of customers.” As for the
tion as the CEO of three companies at is hitting Perennial’s proits this year. Net hotel competition: “he hospitality out-
CapitaLand, where he pioneered real proit is expected to reach only $5 mil- look for Singapore remains positive,
estate investment trusts and specialized lion, down dramatically from last year, and there are limited ultra-luxury hotels
in mall development around Asia. and rising to $7 million next year, ac- which are housed in conservation build-
He started Perennial with $7 million cording to an average of analyst estimates ings in the Civic District. he ability to
of his own money, giving himself ive compiled by Bloomberg. But revenue leverage the Capitol heatre for major
years to succeed. In 2011 he listed Peren- is expected to come in at $69 million, a events puts the hotel in a good position
nial China Retail Trust in Singapore, and 29% rise from last year, before jumping to to compete in the market.”
one investor was Kuok Khoon Hong, the $146 million next year. Meanwhile, skeptics warn that Eden
scion of Singapore’s Wilmar International he two banks that cover Perenni- Residences Capitol, with several lats al-
and nephew of Malaysia’s richest tycoon, al have “buy” recommendations on its ready on the resale market, needs an
Robert Kuok. heir relationship helped shares. DBS calls Perennial’s China proj- overhaul. Veteran property agent Samu-
drive Perennial’s growth, with Kuok be- ects “hidden gems,” though with lengthy el Eyo, managing director of Lighthouse
coming a major shareholder in 2012. gestation periods, while a CIMB report Property Consultants, says it can be “re-
Perennial Real Estate Holdings went cites “a faster-than-expected ramp-up of positioned” for newly rich Millennials
public in 2014, and the company has ex- Capitol Singapore” as one potential cat- but only ater the Capitol’s retail compo-
panded beyond property into healthcare. alyst for growth. CIMB estimates that nent has been upgraded. “Older rich cli-
It boasts a $950 million market cap, and when the Capitol project is fully opera- entele won’t go for North Bridge Road
Kuok and his Wilmar International is the tional it could yield up to $40 million of as a luxury address,” he says, adding
biggest shareholder, with a 56.2% stake. annual income. that it’s now competing with the near-
Pua holds 10.3%, and Sim holds 15.4%. Perennial does have industry skep- by South Beach development, where 190
Sim, whose V3 Group houses massage- tics, though the most prominent ones luxury residences just went on the mar-
chair maker OSIM International and decline to speak on the record. One ket. “It’s brand new, and Eden has already
TWG Tea, irst invested in 2010 ater Pe- competitor has concerns about Peren- launched; it will need a lot of marketing.”
rennial’s consortium won the Capitol ten- nial’s China investments, pointing to Taking the long view, Pua marvels
der; he had also bid on it. the cooling property market, rising at Perennial’s growth to date. “In nine
Pua is quick to put the Capitol proj- government oversight and consumers’ years, from nothing we created a compa-
ect in perspective. He says it represents preference for online shopping. ny of this size,” he muses before skipping
only 10% of the company’s holdings; 67% Another competitor doubts that the ahead to the opportunities in China. Pe-
of the portfolio is made up of enormous Capitol project will live up to expecta- rennial’s eight high-speed-rail projects,
mixed-use developments in China as Pe- tions because high-class retail tenants once they’re online, will contain more
rennial seeks to become the dominant will be wary about replacing mid-lev- than 4 million square meters. “In ive to
high-speed-rail player. hree projects— el ones, and Kempinski will face stif ten years we will be a very diferent com-
in Chengdu, Xi’an and Tianjin—are along competition from the area’s numerous pany.” Where does that leave Singapore?
the national high-speed-rail network, of-
fering stores, hotels and medical hubs
that include eldercare facilities. Five more “FROM NOTHING WE CREATED A COMPANY
may be in the works. “We think margins OF THIS SIZE. IN FIVE TO TEN YEARS WE
in China are much better,” he says, com-
paring it with Singapore. WILL BE A VERY DIFFERENT COMPANY.”
Perennial has also invested in Indo-
nesia, Malaysia and Ghana. In May the
company announced the $15.6 million luxury hotels. he 131-year-old Raf- “We’re happy to grow in Singapore,” he
acquisition of a site in Sentul City, a mas- les Hotel, for instance, is set to reopen says, “if we can create value—but Singa-
ter-planned township in Jakarta. In Pen- early next year ater a full-scale renova- pore is getting tough.”
ang, Perennial has a joint venture with tion. It announced recently that three As for lessons learned from the Capitol
Malaysia’s IJM Corp. to develop the Light celebrity chefs will open new Ra es’ project, Pua irst lists patience in resolving
City, billed as a waterfront precinct that restaurants. disputes. When asked for other lessons,
will include a mall, convention center, Pua dismisses the doubts. “here are he replies: “I think, for partners you have
two hotels, an oice tower and two con- many successful developments which not dealt with before, it’s important to sew
dominium buildings, plus attractions house various tiers of retail tenants,” he up everything on paper. Some long-term
such as a theme park, an art gallery and a says. “As long as it’s well-planned and ex- partners are the only ones to trust.” F




OCTOBER 2018 FORBES ASIA | 17

FORBES ASIA
RITHY SEAR










































Delivering








the Goods









After a four-year odyssey as a refugee, Rithy Sear returned to

Cambodia and started an entrepreneurial journey that’s made
him one of the country’s top tycoons and biggest boosters.


BY DANIELLE KEETON-OLSEN
ambodia can be a hard sell, but gleaming 45-story hotel, retail and condo- built his businesses by seeing what the rest
Rithy Sear relishes the chal- minium complex that will be completed by of the region was doing and then making
lenge. When he courts poten- the end of the year. hat’s where he’ll present connections with multinational players. He
tial business partners from his argument. fashions himself as a gateway to the coun-
Coverseas, he listens to their Global security company Brink’s got try—a “clean and clear” local partner easing
worries about the small size of the market, this treatment. It already was a customer of foreign investors into a largely wide-open
the lourishing trade in smuggled goods, the Sear’s logistics company, transporting Tif- emerging market while coaxing the govern-
corruption. And once they’re done, he begins fany & Co. jewelry to Cambodia. But Sear ment into removing barriers to econom-
working tirelessly to reshape their opinions. igured that Brink’s could increase its local ic development. Partners in the region “trust
Sear’s negotiating advantages are prep- revenue eightfold if it worked with World- me; my credibility is very important,” he ex-
aration and conidence. He usually doesn’t Bridge on ofering more services in the plains. “I never do a business trade in which
meet investors in his oice. hat’s a clut- country. When it hesitated, the hard-charg- anyone loses.”
tered, temporary suite in the Phnom Penh ing entrepreneur says he began a full-court Singapore, in particular, has been an in-
headquarters of his Worldbridge Interna- press, lying to any Southeast Asian coun- spiration for Sear, and Singapore property-
tional, his logistics, property and invest- try that a Brink’s executive happened to be development group Oxley Holdings his big-
ment company. Instead, he chooses the ex- visiting until it signed a joint-venture agree- gest partner. he Oxley Worldbridge joint
clusive business lounge on the 12th loor of ment in July. venture is building he Bridge and has al-
the Soitel Hotel, where the loor-to-ceiling Ever since Cambodia reopened to the ready sold all of its condos. hat persuad-
windows lead your eyes to he Bridge, his outside world in the 1990s, Sear, 48, has ed Oxley’s executive chairman and chief ex-




18 | FORBES ASIA OCTOBER 2018

Rithy Sear at The Peak, his $580 million complex in Phnom Penh that will include a Shangri-La hotel.
ecutive, Ching Chiat Kwong, to commit to Ching says he was surprised by the young, more than two decades, but he declines to
building two more Phnom Penh projects. bustling population of Phnom Penh. He provide property records. He also says he
Next is he Peak, a $580 million complex quickly signed on ater meeting Sear, and owns 100% of privately held WorldBridge,
of three 55-story towers that includes a 300- now calls Cambodia one of his best-per- along with a 50% stake in Oxley World-
room Shangri-La hotel expected to be in- forming overseas investments. bridge and 40% of Kerry Worldbridge Lo-
ished in 2020, and then he Palms, a $100 he glitzy real estate developments gistics, a joint venture with Hong Kong’s
million luxury riverside community. Homes grab lots of attention, but the foundation of Kerry Logistics Network that provides lo-
will start at $350,000, and this in a country WorldBridge is the logistics company, which gistics, freight forwarding and supply-chain
where per capita gross national income is Sear started as a delivery service in the 1990s support. He says his companies and joint
just above $1,000 a year. and then expanded into import/export and ventures generated $1.3 billion in reve-
At the Oxley WorldBridge showroom outsourcing services. It boasts 3,750 em- nue last year, with the property business ac-
in central Phnom Penh, Sear seems to con- ployees, including some in Vietnam, Laos, counting for 60% of that. But he declines to
cede that he had to hire foreign design and hailand and Myanmar, and lists more than provide net-proit igures and other inan-
construction irms because local compa- 200 multinational customers. cial results.
nies aren’t yet able to build 45- and 55-story Sear says he’s a billionaire, and that well Corruption is seen as endemic in Cam-
towers. But he lauds the designs as his own may be, but Forbes Asia cannot verify this. bodia—the country ranks near the bottom
ideas, declaring that the silver and gold sky- He bases that claim largely on the value of of the 180 countries on Transparency Inter-
scrapers of he Bridge and he Peak could the 7.5 million square meters of land around national’s Corruption Perception Index—
blend into Singapore’s skyline. For his part, the country that he says he’s purchased over and it sours foreign investors’ stomachs even
ERIKA PINEROS FOR FORBES


OCTOBER 2018 FORBES ASIA | 19

FORBES ASIA
RITHY SEAR




faster than prahok, the country’s tradition- more adversity than Sear. Born into a Chi- saving and then dumping the 171 surviv-
al fermented ish. But Sear says he doesn’t nese Khmer family in Phnom Penh, the ing refugees in a ishing village in Kaliman-
pay bribes to customs oicers to move cargo third of ive children, his family was forced tan. His six months there still haunt him,
or hide a shipment’s contents, and customs to abandon their home and their auto-me- but he recalls the small wonders he found
oicials and observers agree that he’s clean. chanic business in 1975 under the Khmer during the ordeal, among them the coconut
He instills conidence in customers by com- Rouge. hey ended up in the regime’s work candies brought by missionaries from China
plying with the government’s Best Traders camps, where families were made to grow and the large, lucid eyes of the mermaid he
Scheme, which promotes clean, prompt and rice. His mother’s role as a cook in the swears he saw. he refugees were eventual-
inexpensive transfers of cargo at the bor- camps allowed her to save morsels for her ly shuttled of to a UN camp in the Riau Is-
ders. He is an oknha, a title given to anyone family, wrapped and submerged in the water lands, and he translated for the UN for three
who’s donated at least $500,000 to the gov- tanks she carried at the end of the day. years before being ofered passage back to
ernment for public projects. It gives him ac- Despite the cadres’ slaughter of ethnic- his family in Phnom Penh.
cess to Prime Minister Hun Sen, but he says Chinese citizens, everyone in Sear’s fami- At his riverside villa today, over bottles
he advises on entrepreneurial matters rath- ly survived, but the hardships did not end of Acqua Panna imported from Italy by his
er than lobby for particular policies. Cam- with the regime’s fall in 1978. With a git for Auskhmer Import & Export, he looks back
bodian tycoons oten beneit from ties to the learning languages, Sear furtively picked up on his refugee voyage and explains how to
prime minister and his family, but there’s no English from a Russian embassy worker, survive on seawater: Mix one part tooth-
evidence that Sear’s businesses have received which was illegal under the country’s then- paste with two parts seawater and wait half
any special favors. Vietnamese control. But the skill was high- an hour for the salt to settle at the bottom.
Sear didn’t become rich and success- ly valued as the U.S. and UN began slip- his tonic will loosen the bowels, but ater a
ful without having an eye for a deal. When ping support into Cambodia, so in 1988 his leak in the supply of fresh water onboard, he
French antique dealer Beatrix Dayde mother arranged his passage on a refugee says, it was better than nothing.
Latham let Cambodia and a home illed boat to Australia so he could ofer his servic- Ater the country’s irst election under
with Ming Dynasty antiques, Sear bought it es as a translator and seek aid. the Transitional Authority in Cambodia in
and all the antiques for just $2.65 million on he night before sailing, another ship, 1992, Sear leveraged his UN connections to
the promise he’d preserve the lavish custom carrying 300 refugees, sank not far from Si- make deliveries for embassies and aid agen-
construction. But he doesn’t stay in the mu- hanoukville. As Sear’s cramped ishing boat cies. He and his partners didn’t have a truck,
seumlike villa because its southern-facing set out, with his uncle steering, dozens of so they’d spend $200 of the $800 to $1,000
construction violates the principles of feng bodies still bobbed in the waves, he remem- they charged to rent a vehicle. Sometimes
shui. He visits the property only to host and bers. Weeks later his boat also sank, crash- they had to dodge rocket-propelled grenade
impress ambassadors, or ish from its prime ing into a reef near Sumatra. Clinging to ire and unexploded ordnance. When Cir-
location along the Mekong River. a wood plank, he loated for three or four cle Freight International pulled out of Cam-
Few tycoons grew up poorer or sufered hours until Indonesian authorities arrived, bodia in 1993, he says, it let him its remain-
ing assets—a table, two typewriters and an
empty balance sheet. But he was able to use
its connections to build his business. With
ration deliveries bringing him to the hai
border, he forged a friendship with the sec-
retary of the chairman of hailand’s CTI Lo-
gistics, who later led him to a future partner,
Kledchai Benjaathonsirikul of Kerry Express
(hailand).
Sear’s proits grew, but he didn’t trust the
local banks, so he parked his earnings in
land. He started buying land along Phnom
Penh’s Russian Federation Boulevard,
which connected the city with the airport,
because he saw developments springing up
between other Southeast Asian cities and
their airports. Land in a conlict zone was
cheap, going for as little as 10 cents a square
meter, so he bought a hectare or two each
month. “I thought that since the UN spent ERIKA PINEROS FOR FORBES
$2 billion to make this country peaceful, it
Gold standard: a model showing what the finished Peak project will look like. won’t let Cambodia go back to that type of




20 | FORBES ASIA OCTOBER 2018

THE REFUGEE VOYAGE OF RITHY SEAR



THAILAND
Bangkok
VIET
CAMBODIA NAM


Phnom Penh
1. He left Phnom Penh in 1988, Ho Chi
one month shy of his high 1 Minh City 2. Along the coast of Vietnam, the
school graduation, and joined refugees clashed with Vietnamese
270 other refugees on the pirates but scared them of with
Sihanoukville coast to set of Khmer Rouge-era weapons
to Australia on an old Chinese stashed onboard.
fishing boat.
2
3. The refugees aimed to buy food
and fresh water in Singapore, but the
Singaporean navy stopped the boat
and held Sear in handcufs when he 4. Soon afterward the boat
tried to translate. The navy eventually crashed into a coral reef on the
sent the boat on its way with fresh Sumatra coast and sank. He and
MALAYSIA other refugees floated in the sea
supplies, but only after the weapons before rescue boats arrived;
Kuala
6. The UN moved the Lumpur were tossed overboard. some 100 passengers died.
refugees to the Galang
Refugee Camp in the Riau
Islands. He worked as a 5. The survivors were taken to a fishing
translator for three years Singapore village on the Kalimantan coast and were left
before getting an ofer of 3 there for more than six months. The villagers
transportation back to couldn't communicate with the refugees and
Phnom Penh in 1992 to 6 feared that the refugees were planning to
serve as an oicial attack them, so they plotted to kill the
during the UN- 5 refugees; finally, the authorities arrived.
facilitated elections. 4
INDONESIA
Sumatra INDONESIA
Kalimantan


serious civil war again,” he says. neurs rushed into e-commerce in 2015, Southeast Asia, Sear launched his own fund,
Sear has been able to use his valuable Worldbridge Commerce launched an on- Ooctane, in July. He hasn’t decided on a di-
land in Phnom Penh and six provinces to line shopping platform, My All In One Mall. rection for the fund beyond assisting ear-
entice some of his foreign partners into joint In a partnership with Kerry Express, Sear ly-stage ideas, though he has mentioned a


ventures. he irst two Oxley Worldbridge pumped $17 million into the state-owned preference for intech investments. But the

projects are rising on high-priced land in Cambodia Post to improve deliveries, hop- money is there: He committed $5 million
Phnom Penh’s emerging business district, ing this would help his new business. But and won’t seek stakes in the startups until

the Tonle Bassac neighborhood. he Kerry WorldBridge has suspended the platform they prove viable, and he drummed up an
joint venture is developing a special eco- until the government signs a long-awaited additional $45 million from seven other
nomic zone on Sear’s land along National e-commerce law that would determine how investors.
Road 2 and is using tax breaks to attract for- to tax small orders by individuals. Education and technical training in Cam-
eign investors to develop light manufactur- If Sear is frustrated with the govern- bodia may not be at the level of its neighbors’,

ing. his month he’s opening SME Eco Park, ment’s sluggish response to e-commerce and but Sear says he’s eager to push any young

where Worldbridge will ofer small and me- other innovations, he shrugs it of. For fast- person with a big idea. He makes a similar

dium-size enterprises space and services to paced advances he’s optimistically looking to argument to the entrepreneurs who question
build their businesses. And his Worldbridge the technology-savvy college students work- whether an advanced logistics network can
Homes is jumping into the afordable-hous- ing for his business-process-outsourcing accelerate the development of a small mar-

ing market, selling 2,457 houses starting at company, or his 21-year-old son, who runs ket such as Cambodia. “If we lead companies
$25,000 in a development that’s expected to an online shop selling his dad’s imports. across Cambodia, from Vietnam to hailand


be completed in 2020. (Sear also has a daughter, 17, who is study- and hailand to Vietnam, what do we get?
Even with his Best Trader status and his ing to work in the tourism and hotel-man- Job creation,” he explains. “Cambodia is in
oknha title, the bureaucracy can still sty- agement industries.) the center of two big countries, so we have to

mie Sear. When Cambodian entrepre- Excited by the venture-capital boom in know how to gain beneits from them.” F
PETER AND MARIA HOEY FOR FORBES


OCTOBER, 2018 FORBES ASIA | 21

FORBES ASIA
ACER






























Get in the Game








Jason Chen has Acer refocused on PCs but

aimed at consumers of higher-end hardware.

BY RALPH JENNINGS
J ason Chen had spent 23 years in tor, following 14 in sales and marketing and you just go lower, lower and lower.

jobs at Intel. Acer had lost money since
big global tech, but when Acer’s
Innovation needs money, R&D, and
board of directors asked him how
2011 as global PC sales slowed and Ital-
we’re cheaper and cheaper until no-
he would turn the ailing Taiwan
icon around, he paused. “I said, ian-born CEO Gianfranco Lanci sud- body’s making money. Who sufers?
denly quit over internal discord. Rev-
Users sufer, and the industry sufers.”
‘I’ve never done that,’ and the next ques- enues in 2013 came to $11.8 billion, Chen has pushed particularly to de-
tion was, ‘How are you going to do it?’ ” down 16% over the previous year, and velop the Predator and Nitro lines of
Chen recalls. net losses totaled $370 million. Acer gaming PCs, including the world’s most
Chen landed the job and over four founder Stan Shih, whose family owns a expensive made-for-gamers notebook:
years has turned the company around. 5% stake in the company, called 2013 a the $9,000 Predator 21X. It weighs 8.8
Recent quarters have seen sizable jumps year of “business underperformance.” kilograms and comes with a suitcase.
in revenue and proitability, to levels Shih now consults with Chen and Gaming PCs worldwide will be worth
not seen since the PC maker was mak- backs what he’s doing. he irm dropped $32.9 billion this year, market intelli-
ing Forbes Asia’s Fab 50 list of best com- its smartphone line two years ago be- gence irm Newzoo forecasts, as players
panies in 2010. (In recent years it hasn’t cause it was losing money. From 2014 spend 13% more—that’s $138 billion—
even qualiied for our Global 2000 Acer had peddled Iconia-brand phones, than last year.
ranking of biggest irms.) including a $270 handset designed for Predator machines, the CEO says,
Chen, 56, has accomplished this serial travelers with space for three SIM exemplify Acer’s postreform focus on
largely by getting Acer back to what cards. proprietary technology. Some use metal
made its name: personal computers. Part of the shit was refocusing staf. fans instead of old-style plastic ones to
You know, those boxes you thought had he other was repositioning in the mar- improve ventilation. Acer has grabbed
been supplanted by smartphones. And ketplace. “he irst thing I believed 300 patents for its own “thermal tech-
he’s done it not by trying to undersell the when I came in was to advocate a clear nology” to cool processors without
many bottom ishers in the sector—Acer direction,” Taiwan-born and -bred Chen slowing them down, Chen adds. Desk-
had acquired a rap as a low-cost brand— says in luent English at the company’s tops use EMI shielding technology to
but by developing technology that ap- suburban Taipei headquarters. “he stop components inside a PC from in-
peals foremost to the most critical mar- biggest problem at the time that I saw terfering with other devices or endan-
ket for high-end hardware: gamers. was our brand position.” gering a user’s health.
Chen came on as corporate president Vying for the cheapest PC prices Acer’s PC unit is growing, and gam-
and CEO in 2014. He had just inished simply felt “cheap,” Chen says. “It was ing units make up a “high teen” share of
nine years as corporate development the result of the overemphasis on mar- the company’s gross margin, Chen says.
vice president at Taiwan Semiconduc- ket share. You focus on market share he company won’t say how much gam-




22 | FORBES ASIA OCTOBER 2018

“We need our own R&D. Most companies in Taiwan do product development. They don’t do research,” says Acer CEO Jason Chen.



ing devices contribute to overall income. search alone, an outlier as Chen sees it. ments like gaming, but it’ll require some
But this is no longer a volume play: Acer’s Acer hasn’t given up its foothold in very focused marketing, on which other
industry rank in PCs fell from No. 4 in the education sector, which kept it viable vendors are prioritized, too.”
the world (even in its slump years) to No. during the lean years. It still develops tab- Acer has a game plan for the mass
6 last year on declining quarterly ship- lets under the Iconia brand. But the tablet nongaming market, including profession-
ments and back to No. 5 by mid-2018 at 4 Chen likes to tout is the world’s irst that als who work in diferent places through-
million units sold, according to data from runs on Google’s cloud-based Chrome- out the day. It calls for making notebooks
market research irm Gartner. book operating system. Acer introduced thinner and lighter without a hit to pro-
Under Chen, Acer also formed a re- the Tab 10, for students, this year ater cessor speed, Chen says. He bills the 14-
search and development unit that gets 1% more than a half-decade of making inch Swit 7 notebook as “the thinnest
of company revenues. “We need our own Chromebook PCs and taking a leading computer in the world” at less than 1 cen-
R&D,” he says. “Most companies in Tai- share of those in 2017. timeter top to bottom when the screen is
wan do product development. hey don’t Chen deserves credit for “getting the folded down. he Swit 5 also weighs an
do research.” he R&D unit is Acer’s irst company back on its feet,” says Bryan Ma, unusually light 990 grams. “Even though
since it separated 14 years ago from Wis- devices research vice president for IDC they are thin, they are robust, solid,” he
tron, which now assembles electronics for in Singapore. But he cautions that gam- says.
the likes of Apple. he R&D budget has ing devices might not drive income over A good salesman has to be an opti-
increased 50% over the past four years. the long term. “What gets tricky is the mist, and Chen sometimes must face of
Besides pushing on the game-player fact that the PC market today is largely against the frustrations of the technolo-
front, the R&D team is looking into arti- being driven by commercial sales rather gists among his staf of 7,900. “he big-
icial intelligence schemes—for example, than consumer, the former of which Acer gest headache? People keep telling me
to help taxi drivers ind waiting passen- is the underdog in when compared to gi- problems,” Chen says. “I keep ignor-
gers or to guide any driver to empty park- ants like HP and Dell,” Ma says. “Acer, of ing them. hat’s my style, to focus on the
ing spaces. About 200 people work in re- course, can still carve out a niche in seg- bright spot, the opportunities.” F
BILLY H.C. KWOK/BLOOMBERG


OCTOBER 2018 FORBES ASIA | 23

FORBES ASIA
ADOBE ADAPTS









Keep On Keepin’ On






Adobe Systems continues to reinvent itself
as it keeps pace in the crowded software ield.


BY PETER CARBONARA
In 2012 Adobe began migrating corporate customers to the
dobe Systems is king of its hill in content-creation cloud and to subscription payments. Now its popular Creative
sotware. No one comes close to ofering all that it Cloud suite of products generates about $5.4 billion in annual
has: Photoshop, Acrobat and Illustrator. Its net proit recurring revenue. Alex Zukin, a Piper Jafray analyst, estimates
margin this year will be 28.7%, predicts Value Line, that subscription payments accounted for 80% of Adobe’s $2.2
Abetter than the margin at Microsot. Its shares are up billion of revenue in the May 2018 quarter.
1,000% over the past seven years. he next step in the reformation of the business model
Why, then, is Adobe running scared? It veered of into Web was to ofer those customers a lot more than a way to design
analytics in 2009, paying about $1.8 billion for a irm (Omniture) a sales brochure. With Omniture, it can help them track and
that had only $296 million in revenue. hen it wanted to get into e- analyze how customers behave online. Brad Rencher, who was
commerce, and ater being outbid two years ago by Salesforce in the Omniture’s head of business operations when his company was
auction for cloud-based Demandware, it had to settle this year for bought, is now Adobe’s general manager for digital marketing.
second-choice Magento, at a cost of $1.7 billion. (And in September Adobe’s goal, he says, is to move away from “just making con-
Adobe agreed to acquire Marketo for $4.75 billion. he San Jose tent to making a business of iguring out how it was being used.”
irm makes business-to-business marketing sotware that helps Magento, based in Campbell, California, is the third leg on
brands track their customers online.) the stool. he irm, which was spun of from eBay in 2015 and
he explanation for the expensive expansionism: In the rapidly was owned by private equity investors at the time of the Adobe
changing world of sotware, small pieces of turf are hard to defend. deal, helps companies sell on the internet with programs to
here is always the risk that some bigger company will either wrap build and manage online storefronts. Magento chief executive
a competing product into a larger suite you don’t ofer or, worse, Mark Lavelle, who will stay with Adobe, says $155 billion in
give away for free what you’re selling. hat’s what doomed Lotus in goods and services changed hands via Magneto globally
spreadsheets and Netscape in browsers. last year.
In the early years ater Adobe’s founding in 1982 by two “Commerce has become an integral part of the end-to-
Xerox PARC refugees, John Warnock and Chuck Geshke, its end experience customers now expect,” Narayen says in an
concentration on the single category of document creation email. Aseem Chandra, Adobe Experience Cloud senior vice
served it well. Now, with companies like Oracle, Salesforce and president for strategic marketing, puts it a little more succinctly
SAP ofering ever more comprehensive sotware to corporate when he says, “Every experience should be shoppable.” F
customers, a narrow focus is dangerous.
So is resting on laurels. At this February’s Silicon
Slope Summit in Salt Lake City, Adobe chief executive
Shantanu Narayen remembered: “In 2009 we saw that
while people were clearly using our products, we weren’t
innovating at a fast enough pace.” Most analysts who
cover Adobe estimate the company’s R&D spending this
year will be about $1.2 billion, or 14% of revenues.
Narayen, a 56-year-old engineer with an M.B.A.
from UC Berkeley, had a rough start. He walked into
his present job in November 2007, the very month
that marked beginning of the 2007–09 recession.
Adobe was stuck in a glacial, 18- to 24-month prod-
uct cycle in which it developed new versions of sot- ABHIJIT BHATLEKAR/MINT VIA GETTY IMAGES
ware like Acrobat and Photoshop, printed them onto
CDs and then packed them into boxes. Sometimes
customers would pay up for the new version; when
times were tight they might stick with the old one. “We weren’t innovating at a fast enough pace”: Adobe CEO Shantanu Narayen.




24 | FORBES ASIA OCTOBER 2018

TECHNOLOGY BEN SIN // GADGETMAN




CHINESE LIMES






THE MOST COMMON way to get “Mobile payments is quite behind in the U.S.,
around Silicon Valley—the sprawl- compared to Asia,” Yao said. “So we are hop-
ing cluster of suburban Northern ing something like PayTM can be brought
California towns that the world’s most over.”
influential tech companies call home— Throughout our talk, it was evident that
is still by car. But dockless electric Yao feels that the U.S. is lagging behind China
scooters may be a close second. Walk in the use of smart apps for life’s daily activi-

around downtown San Jose or Palo ties. Another idea his firm is looking into is
Alto and you see streets filled with elec- bringing to the U.S. a mobile app that allows
tric scooters, moving and parked, with users to pay for parking without having to
either the Bird or Lime brand. deal with meters and fiddle with credit cards
The latter, with its lime-green color or coins. In his words: “Parking in the U.S.
scheme, stands out more. It’s also been around longer, and according to right now is also behind.”
some, it is a superior ride. Of course, Yao is in this business not only to
As someone who covered Shenzhen’s dockless bike startups at an make life more convenient for Americans—the
early stage—and witnessed their failed attempts to break into the NorCal electric scooter boom has made short com-
market—I figured these dockless, smart electric scooters that users pick mutes in Silicon Valley so much easier—but
up, ride and then park anywhere in a city were made by American com- also because there’s a lot of money involved.
panies borrowing the idea from China and applying it domestically. “We launched Lime in America instead of,
Little did I know that Lime had serious Chinese roots. LimeBike say, in China, not just because there was less
cemented its base in San Mateo (another suburb in NorCal) and re- competition, but because you can obviously
cently got $335 million in funding from American tech giants Uber and price higher in the states than in China,” Yao
Alphabet (parent company of Google), but the founder of Lime, Toby said, pointing out that an average ten-minute
Sun, is a native of Shenzhen; Lime’s first investor was Shanghai native ride on a dockless bike in China costs roughly
Thomas Yao, cofounder of IMO Ventures. 5 yuan ($0.50), whereas a ride in the U.S. costs
While the words “Designed in California” are proudly displayed on over a dollar. “We only look to bring over

the scooter’s front plate and Lime’s website has that stereotypical Sili- companies and business models with a proven
con Valley hipster Millennial vibe, Yao says Lime’s roots are Chinese. track record of success in Asia,” Yao said. “We
“[Dockless bike/scoooter share] is a Chinese innovation,” Yao told me don’t take much risk in terms of business
during a recent meeting. “And my firm [IMO Ventures] specializes in models.” F
bringing over innovations from Asia to the West.”
Yao did more than just write a check to Sun. Ac-
cording to Sun, Yao helped provide the engineering
team that built LimeBike’s first batch of bikes and
scooters. “[Thomas] and IMO Ventures were very
important in helping Lime’s vision when it first
started,” Sun said. “Lime leveraged [Yao’s] cross-
border domain expertise and cross-border team
recruiting.”
Started in 2016 by Yao and four partners, IMO
Ventures has invested in more than 20 projects,
THOMAS KUHLENBECK FOR FORBES planning to make their way, to the U.S. or Europe. Lime’s first investor, Thomas Yao of IMO Ventures, and Lime founder Toby Sun.
all Asian startups that have made their way, or are


IMO Ventures’s other well-known investment is
PayTM, India’s dominant digital-wallet startup.


BEN SIN IS A HONG KONG BASED CONTRIBUTOR TO FORBES.COM WHO WRITES ABOUT CONSUMER TECH.




OCTOBER 2018 FORBES ASIA | 25

FORBES ASIA

BEST UNDER A BILLION — TCI




































Big Swallow







Founder’s protégé has brought “bioscience design”

to a nutricyclicals maker in Taiwan.



BY JOYCE HUANG

fter Vincent Lin, an of the nine labs, with the promise basis for a repeat 2018 appearance
early supersalesman of tailoring personalized needs to for his outfit on Forbes Asia’s Best
for Taiwan’s TCI, was nutricyclicals. Under A Billion companies list—and
made its CEO in 2010, That last efort is a $6.5 million the genomics could lead to TCI’s
A he decided to take multiyear push on top of what is own retail lines as well.
the maker of private-label dietary now an annual $6 million R&D The company’s trove of novel

supplements up a considerable budget. Lin’s gamble is that this will formulas underlies its 41% gross
notch. He would invest in what keep the 500 corporate customers margin, says Donald Lee, an analyst
he called “integrated bioscience in 48 countries wanting to put their with JihSun Securities in Taipei.
design” (IBD) to come up with pro- labels on TCI wares without much “Its strength lies in its fast-paced
prietary ingredients to differentiate haggle room over price. That’s the development of key ingredients, its
itself across a product line address- capability of manufacturing a com-
ing everything from sleep promo- prehensive array of dosage forms
tion and weight loss to countering and its perfect timing of product
depression and skin aging. launch, just to name a few,” he says.
TCI would unlock and extract Lin, 42, has led the push and as
new substances—such as from of mid-2017 took over as chairman
agricultural wastes like longan as well from William Yang, who
shell and banana peel—through its founded TCI in 1980 as a trading
laboratory work. That IBD is being company in textiles and assorted
carried out by Ph.D.s among a team other goods. (TCI originally was
of 200 researchers employing biol- Tai Chiang—or “big river”—In-
ogy, agronomics, industrial engi- dustrial.) An ironsmith’s son who
neering and consumer behavior majored in plant pathology and
studies to attract premium-brand once sold orchid seedlings, Lin was
clients. Since 2013, the effort has William Yang founded TCI in 1980 as a trading a dynamo from the start for Yang’s
expanded into genomics in one company dealing textiles and other goods. foray into preventative potions,




26 | FORBES ASIA OCTOBER 2018

“We’re a group of
fanatics”: TCI CEO
Vincent Lin.


CRAIG FERGUSON FOR FORBES


OCTOBER 2018 FORBES ASIA | 27

FORBES ASIA

BEST UNDER A BILLION — TCI



doing seven sales calls a day in into skin pores over a 15-minute flag products that could interdict
Hong Kong. By 2005, supplements application and sell at the likes of the ailment. So not everyone may
were a majority of TCI’s sales. Sephora for several dollars a pop. need the banana peels.)
Soon Lin was in executive roles, Along the way, there were of Even minor breakthroughs can
driving a manufacturing process course those who doubted Lin’s have big potential market effects.
crimped by false economies to product instincts. In 2011 his idea The IBD model has yielded emul-
third-party plants that didn’t fulfill for using the forsaken peels in what sified fish-oil liquids that are
orders or had quality gaps. He re- became the popular Happy Banana odor less. That matters in a sizable

directed—when slimming capsules compound (for better disposition product category where both very
became discolored, Lin would issue and sleep) drew strong internal young and old find it hard to swal-
a recall, hang the cost. He soon fig- resistance. So the CEO brought low capsules that weren’t palatable
ured it was better for TCI to build in would-be buyers to settle the if breached. Lin credits the white-
its own factories, starting in 2008 matter. “Some had sought a radical coated thirtysomethings who popu-

and today totaling five—three in way to challenge me before they late his R&D labs.
southern Taiwan and two in Shang- built faith in me. But over the years, Rebecca Chan, head of TCI’s nu-
hai. A zero-defect standard on many have come to realize that I’m trigenomic department, says the boss
stuff like bottle sealants to prevent not a capricious person and most has allowed her team ample room
to experiment. More important, he
trains researchers to have a market-
“WHAT I DO BEST THESE ing mindset. “Vincent asks for more


DAYS IS TAP THE POTENTIAL than scientific data from us, which
is basic. He pushes us to deliver
IN YOUNG PEOPLE AND MAKE THEM unique selling points for any given

BELIEVE THAT ANYTHING ingredient so that our sales can easily
persuade buyers,” Chan says.
IS POSSIBLE.” Lin saw market cues for hot sell-
ers, be they collagen-based prod-
ucts or fragrant pomegranate en-
contamination is a selling point to of my ideas are well thought out. zyme masks—that Chan says caught
Japanese and other clients. More important, I’m a doer, who her team by surprise. “What I do
The result is today’s humming sets an example,” he says. best these days is to tap the poten-
operation, whose $134 million Founder Yang, 74, a believer in tial in young people and make them

in latest annual sales boasts 30% separating ownership from man- believe that anything is possible,”
annualized growth over the past agement in sustaining businesses, says Lin, father to three daughters
five years. (This has jumped to a saw what he wanted in Lin. (Yang and a newborn son himself. “We
76% pace year-on-year in 2018 so maintains control over a larger may not have the best talent, but
far.) The biggest slug of that is in stake than the combined 3.6% by we’re a group of fanatics, who focus
“functional drinks,” primarily a col- Lin and Lin’s younger brother, who on doing one thing right.”
lagen mix for such results as firmer runs the Shanghai operation.) His single-minded goal is a 1%
skin or more limber joints, and Now TCI, like others in the share of the global food supple-
on which several leading Chinese nutricyclicals business (includ- ments market by 2030, which
direct sellers, including Melalueca, ing food giant Nestlé), is on the would take TCI to near $7 billion
are known to have scored big. The genome quest to give customers in sales. Asia is a hub for “natural”
mainland accounts for three quar- custom-made supplements. By boosters and remedies, ensuring
ters of TCI’s total revenues. the Lunar New Year, Lin plans to plenty of competition ahead. TCI
Food supplements, in the form deploy robot testing of the RNA sees Nutri Biotech, a wholly owned
of tablets, capsules and powder, “messengers” from DNA samples subsidiary of Korean cosmetics
make up nearly another 40% of to determine ideal remedies. (In maker Cosmax, as a prime rival.
revenues, and the remainder is in TCI’s layman’s terms: DNA is like “We’ve excelled in intercepting
skin-care products—namely, facial your overall genetic book, while the future,” says Lin. “[Product] ef-
masks. These are constituted of RNA shows which page your health ficacy, instead of cost, is what will
liposomes, which aid in the ab- is on. So RNA results can indicate enable us to compete for the future
sorption of a proprietary essence where one could get sick and thus and where our value lies.” F




28 | FORBES ASIA OCTOBER 2018

Forbes Asia Best Under A Billion


Forum and Awards Dinner





November 19, 2018 • Tokyo, Japan






Forbes Asia’s Best Under A Billion list recognizes 200 of the

best small and midsized listed companies in the Asia

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ˁǫʋǠ Ŕ ʠŔȍ ɭơʽơ ʠơ ʠ Ǝơɭ Źǫȍȍǫ



þ
ƃơȍơŹɭŔʋơ Ŕ Ǝ Ǡ

ɭ ʋǠơ ɽʠƃƃơɽɽ
lj ʋǠơɽơ
Best Under A Billion companies, Forbes Asia

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ɽʋǫ nj Ŕ b
ɭʠ Ŕ Ǝ ˁŔɭƎɽ 7ǫ ơɭ

ʋǠŔʋ ˁǫȍȍ Źơ ǠơȍƎ ǫ þ
ȇˊ
Ŕ Ŕ
¥
ʽơ Źơɭ ! "# $







Visit forbes.com/BUB to read more For more information, please email
ŔŹ
ʠʋ ʋǠơ Best Under A Billion [email protected]
ɭ ʽǫɽǫʋ
ƃ
Ŕ ǫơɽ forbesasiabestunderabillion.com











Presenting Sponsor:

FORBES ASIA
WHATSAPP































Seller’s









Remorse








Facebook’s blockbuster $22 billion WhatsApp purchase

instantly made Brian Acton one of the richest people in

America. But as with his Instagram peers, his idealism clashed
with Mark Zuckerberg’s inancial juggernaut, leading to perhaps

the most expensive moral stand in history. For the irst time,
Acton explains why he walked away from $850 million.


BY PARMY OLSON


hatsApp cofounder used by more than 1.5 billion people Now he’s talking publicly for the
Brian Acton, 46, sits and provides ad-free, encrypted mes- irst time. Under pressure from Mark
in the cafe at the saging as a core feature. “his was in- Zuckerberg and Sheryl Sandberg to
glitzy Four Seasons formational, and useful.” monetize WhatsApp, he pushed back
WHotel in Palo Alto, he past tense and wistfulness hang as Facebook questioned the encryp-
California, and the only way you’d guess in the air. More than four years ago, tion he had helped build and laid the
he might be worth $3.6 billion is the $20 Acton and his cofounder, Jan Koum, groundwork to show ads and facili-
tip he briskly leaves for his cofee. Sturdi- sold WhatsApp, which had relatively in- tate commercial messaging. Acton also
ly built and wearing a baseball cap and T- signiicant revenue, to Facebook for $22 walked away from Facebook a year be-
shirt from a WhatsApp corporate event, billion, one of the most stunning acqui- fore his inal tranche of stock grants
he’s determined to avoid the trappings of sitions of the century. A year ago he let vested. “It was like, okay, well, you
wealth and runs his own errands, includ- Facebook, saying he wanted to focus on want to do these things I don’t want to
ing dropping of his minivan for mainte- a nonproit. hen in March, as details of do,” Acton says. “It’s better if I get out
nance earlier that day. An SMS has just the Cambridge Analytica scandal oozed of your way. And I did.” It was perhaps
come in from his local Honda dealer say- out, he sent a Tweet that quickly went the most expensive moral stand in his-
ing “payment received.” He points to it viral and shocked his former employers, tory. Acton took a screenshot of the
on his phone. who had made him a billionaire many stock price on his way out the door—
“his is what I wanted people to do times over: “It is time. #deletefacebook.” the decision cost him $850 million. ROBERT GALLAGHER
with WhatsApp,” he says of the world’s No explanation followed. He hasn’t sent He’s following a similar moral code
biggest messaging service, which is another Tweet since. now. He clearly doesn’t relish the spot-




30 | FORBES ASIA OCTOBER 2018

CREDIT TK


OCTOBER 2018 FORBES ASIA | 31

FORBES ASIA
WHATSAPP




light this story will bring and is quick to couldn’t tell you much about the guy,” he users. Once businesses were on board,
underscore that Facebook “isn’t the bad says. In one of their dozen or so meet- Facebook hoped to sell them analytics
guy.” (“I think of them as just very good ings, Zuck told Acton unromantically tools, too. he challenge was WhatsApp’s
businesspeople.”) But he paid dearly for that Whats App, which had a stipulated watertight end-to-end encryption, which
the right to speak his mind. “As part of degree of autonomy within the Facebook stopped both WhatsApp and Facebook
a proposed settlement at the end, [Face- universe and continued to operate for from reading messages. While Facebook
book management] tried to put a non- a while out of its original oices, was “a didn’t plan to break the encryption,
disclosure agreement in place,” Acton product group to him, like Instagram.” Acton says, its managers did question
says. “hat was part of the reason that I So Acton didn’t know what to expect and “probe” ways to ofer businesses an-
got sort of cold feet in terms of trying to when Zuck beckoned him to his oice alytical insights on WhatsApp users in
settle with these guys.” last September, around the time Acton an encrypted environment, according to
Facebook is probably the most scru- told Facebook brass that he planned to Acton.
tinized company on the planet, while si- leave. Acton and Koum had a clause in Facebook’s plans remain unclear.
multaneously controlling its image and their contract that allowed them to get When Sandberg, Facebook’s COO, was
internal information with a Kremlin-like all their stock, which was being doled asked by U.S. lawmakers in early Sep-
ferocity. “hanks to the team’s relent- out over four years, if Facebook began tember if WhatsApp still used end-to-
less focus on building valuable features, “implementing monetization initiatives” end encryption, she avoided a straight
WhatsApp is now an important part of without their consent. yes or no, saying, “We are strong believ-
ers in encryption.” A WhatsApp spokes-
person adds that WhatsApp would begin
ACTON’S PLAN WAS SHOT DOWN placing ads in its Status feature next
year, but that even as more business-
BY SANDBERG. “HER WORDS WERE es start chatting to people on the plat-

‘IT WON’T SCALE.’ ” form, “messages will remain end-to-end
encrypted. here are no plans to change
that.”
For his part, Acton had proposed
over a billion people’s lives, and we’re ex- To Acton, invoking this clause monetizing Whats App through a me-
cited about what the future holds,” says seemed simple. he Facebook-Whats- tered-user model, charging, say, a tenth
a Facebook spokesperson. hat kind of App pairing had been a head-scratch- of a penny ater a certain large num-
answer masks the kind of issues that er from the start. Facebook has one of ber of free mes sages were used up. “You
just prompted Instagram’s founders to the world’s biggest advertising networks; build it once, it runs everywhere in
abruptly quit. Kevin Systrom and Mike Koum and Acton hated ads. Facebook’s every country,” Acton says. “You don’t
Krieger reportedly chafed at Facebook added value for advertisers is how much need a sophisticated sales force. It’s a
and Zuckerberg’s heavy hand. Acton’s ac- it knows about its users; WhatsApp’s very simple business.”
count of what happened at WhatsApp— founders were pro-privacy zealots who Acton’s plan was shot down by Sand-
and Facebook’s plans for it—provides a felt their vaunted encryption had been berg. “Her words were ‘It won’t scale.’ ”
rare founder’s-level window into a com- integral to their nearly unprecedented “I called her out one time,” says
pany that’s at once the global arbiter of global growth. Acton, who sensed “greed” at play. “I was
privacy standards and the gatekeeper of his dissonance frustrated Zucker- like, ‘No, you don’t mean that it won’t
facts, while also increasingly straying berg. Facebook, Acton says, had decid- scale. You mean it won’t make as much
from its entrepreneurial roots. ed to pursue two ways of making money money as . . . ,’ and she kind of hemmed
It’s also a story any idealistic entre- from WhatsApp. First, by showing and hawed a little. And we moved on.
preneur can identify with: What hap- ads in WhatsApp’s new Status feature, I think I made my point. . . . hey are
pens when you build something incred- which Acton felt broke a social com- businesspeople, they are good business-
ible and then sell it to someone with far pact with its users. His motto at Whats- people. hey just represent a set of busi-
diferent plans for your baby? “At the end App had been “No ads, no games, no ness practices, principles and ethics, and
of the day, I sold my company,” Acton gimmicks”—a direct contrast with a par- policies that I don’t necessarily agree
says. “I sold my users’ privacy to a larger ent company that derived 98% of its rev- with.”
beneit. I made a choice and a compro- enue from advertising. Another motto When Acton reached Zuckerberg’s
mise. And I live with that every day.” had been “Take the time to get it right,” oice, a Facebook lawyer was pres-
a stark contrast to “Move fast and break ent. Acton made clear that the disagree-
DESPITE A TRANSFER OF SEVERAL bil- things.” ment—Facebook wanted to make money
lion dollars, Acton says he never de- Facebook also wanted to sell busi- through ads, and he wanted to make
veloped a rapport with Zuckerberg. “I nesses tools to chat with WhatsApp it from high-volume users—meant he




32 | FORBES ASIA OCTOBER 2018

could get his full allocation of stock. weren’t shopping our company,” Acton deal needed to get past Europe’s famous-
Facebook’s legal team disagreed, focus- remembers today. “We had no exit ly strict antitrust oicials, and Facebook
ing on the word “implementing.” Zuck- planned.” prepared Acton to meet with around a
erberg, for his part, had a simple mes- But two things sparked Zuckerberg’s dozen representatives of the Europe-
sage: “He was like, his is probably the mega-ofer in early 2014. One was hear- an Competition Commission in a tele-
last time you’ll ever talk to me.” ing that WhatsApp’s founders had been conference. “I was coached to explain
Rather than lawyer up or try to meet invited to Google’s Mountain View that it would be really diicult to merge
in the middle, Acton decided not to headquarters for talks, and he did not or blend data between the two systems,”
ight. “At the end of the day, I sold my want to lose them to a competitor. An- Acton says. He told the regulators as
company,” he says. “I am a sellout. I ac- other was a document analyzing What- much, adding that he and Koum had no
knowledge that.” sApp’s valuation, written by Morgan desire to do so.
Stanley’s Michael Grimes, that someone Later he learned that elsewhere in
ACTON’S MORAL CODE or perhaps na- had shown to the deal teams at Facebook Facebook, there were “plans and tech-
ivete, given what he should have expect- and at Google. nologies to blend data.” Speciically,
ed at a $22 billion sale price—traces back he biggest internet deal in a decade Facebook could use the 128-bit string
to the matriarchs of his family. His grand- was rushed through over Valentine’s of numbers assigned to each phone
mother started a golf club in Michigan; weekend in the oices of WhatsApp’s as a kind of bridge between accounts.
his mother founded a freight-forwarding lawyers. here was little time to exam- he other method was phone-number
business in 1985, teaching him to take the
responsibilities of a business owner ex-
tremely seriously. “She would lose sleep at WITHIN 18 MONTHS, A NEW
night [over] making payroll,” Acton told
Forbes right before the Facebook sale. WHATSAPP TERMS OF SERVICE LINKED
Acton graduated from Stanford with THE ACCOUNTS AND MADE ACTON
a bachelor’s in computer science and
eventually became one of the irst em- LOOK LIKE A LIAR.
ployees at Yahoo in 1996, making mil-
lions in the process. His biggest asset
from that time at Yahoo: befriending ine details, like the clause about mone- matching, or pinpointing Facebook ac-
Koum, a Ukrainian immigrant he tization. “It was just me and Jan saying counts with phone numbers and match-
clicked with over their similar no-non- we don’t want to put ads in the product,” ing them to WhatsApp accounts with
sense style. “We’re both nerdy, geeky Acton says. He recalls Zuckerberg being the same phone number.
guys,” Acton recalled in that earlier in- “supportive” of WhatsApp’s plans to roll Within 18 months, a new WhatsApp
terview. “We went skiing together, out end-to-end encryption, even though terms of service linked the accounts
played Ultimate Frisbee together, played it would block attempts to harvest user and made Acton look like a liar. “I think
soccer.” Acton let Yahoo in 2007 to trav- data. If anything, he was “quick to re- everyone was gambling because they
el before returning to Silicon Valley and, spond” during the discussions. Zucker- thought that the EU might have forgot-
ironically, interviewing at Facebook. It berg “was not immediately evaluating ten because enough time had passed.”
didn’t work out, so he joined Koum at ramiications in the long term.” No such luck: Facebook wound up pay-
his ledgling startup, Whats App, per- Questioning Zuckerberg’s true inten- ing a $122 million ine for giving “in-
suading a handful of former Yahoo col- tions wasn’t easy when he was ofering correct or misleading information” to
leagues to fund a seed round while he what became $22 billion. “He came with the EU—a cost of doing business, as the
took on cofounder status and wound up a large sum of money and made us an deal got done and such linking contin-
with a roughly 20% stake. ofer we couldn’t refuse,” Acton says. he ues today (though not yet in Europe).
hey ran the business in the style that Facebook founder also promised Koum “he errors we made in our 2014 ilings
suited them, on a cash basis, with obses- a board seat, showered the founders with were not intentional,” says a Facebook
sive attention to the integrity of their in- admiration and, according to a source spokesman.
frastructure. “A single message is like who took part in discussions, told them “It just makes me angry to even re-
your irst-born child,” Acton would say. that they would have “zero pressure” on live that,” Acton says.
“We can never drop a message.” monetization for the next ive years. Linking these overlapping accounts
Mark Zuckerberg irst reached out Facebook, it turned out, wanted to was a crucial irst step toward monetiz-
to Koum over email in April 2012, lead- move much faster. ing WhatsApp. he terms-of-service up-
ing to lunch at Esther’s German Bakery date would lay the groundwork for how
in Los Altos. Koum showed the email to THE WARNING SIGNS emerged before WhatsApp could make money. During
Acton, who encouraged him to go. “We the deal even closed that November. he the discussions over these changes,




OCTOBER, 2018 FORBES ASIA | 33

FORBES ASIA
WHATSAPP




Facebook sought “broader rights” to such numbers sounded too high to same people who built the open-source
WhatsApp user data, Acton says, but Acton—and reliant on advertising. encryption protocol that is part of Sig-
WhatsApp’s founders pushed back, Acton had an alternative that he tried nal and protects WhatsApp’s 1.5 bil-
reaching a compromise with Facebook pushing back with: Invite businesses to lion users and that also sits as an option
management. A clause about no ads send “informational, useful content” to on Facebook Messenger, Micro sot’s
would remain, but Facebook would still WhatsApp users, like the SMS from his Skype and Google’s Allo messenger.
link the accounts to present friend sug- Honda dealer, but don’t allow them to Essentially, he’s re-creating WhatsApp
gestions on Facebook and ofer its ad- advertise or track data beyond a phone in the pure, idealized form it started:
vertising partners better targets for ads number. He also pushed the metered- free messages and calls, with end-to-
on Facebook. Whats App would be the user model. Both to no avail. end encryption and no obligations to ad
input, and Facebook the output. Acton had let a management posi- platforms.
Acton and Koum spent hours helping tion on Yahoo’s ad division over a de- Acton says that Signal now has un-
to rewrite the terms of service and were cade earlier with frustrations at the Web speciied “millions” of users, with a goal
stymied by a section on messaging from portal’s so-called “Nascar approach” of to make “private communication acces-
businesses. “We obsessed over these two putting ad banners all over a Web page. sible and ubiquitous.” While Acton’s $50
paragraphs,” Acton remembers. It was he drive for revenue at the expense of a million should take it a long way—Sig-
here that they lost a battle against the ad good product experience “gave me a bad nal could aford only two full-time en-
model, when a lawyer strongly advised taste in my mouth,” Acton remembers. gineers until he came along—the foun-
dation wants to igure out a perpetual
business model, whether that means tak-
ACTON WAS NOW SEEING ing corporate donations like Wikipedia
or partnering with a larger company, as
HISTORY REPEAT. “IF IT MADE Firefox has done with Google.

Others have come into the space as
US A BUCK, WE’D DO IT.” well. AnchorFree, a sotware company in

Redwood City, California, makes a vir-
tual private network that hides your on-
them to include an allowance for “prod- He was now seeing history repeat. “his line activity and has been download-
uct marketing,” so that if a business did is what I hated about Facebook and what ed 650 million times. he company has
use WhatsApp for a marketing purpose, I also hated about Yahoo,” Acton says. “If raised $358 million and is reported-
Whats App wouldn’t be held liable. it made us a buck, we’d do it.” In other ly proitable. he private search engine
WhatsApp’s founders then did what words, it was time to go. DuckDuckGo is grossing $25 million
they could to postpone Facebook’s mon- Meanwhile, Koum stayed. He would a year, showing ads but without using
etization plans. During much of 2016, accrue time toward his inal stock grants, your search history to build a secret pro-
Zuckerberg was obsessed with the com- even if he rarely went to the oice (“rest ile like Google does. Regulators in many
petitive threat of Snapchat. his made and vest,” in Silicon Valley parlance). countries are similarly pushing back
it easier for WhatsApp to put money- Koum was “able to get through it,” inal- on ad tracking. Saul Klein, one of Lon-
making on the back burner and report ly leaving this April, the month ater Ac- don’s leading venture capitalists, predicts
on new product features that aped Snap- ton’s #deletefacebook tweet, announcing that Facebook will eventually be forced
chat’s: a new camera that let you add via a Facebook post that he would focus to ofer an ad-free subscription option.
emojis to photos in October 2016, and on collecting air-cooled Porsches. In Au- Acton’s metered model, in other words,
Status in February 2017, which was gust 2018, when Forbes sat down with might get the last laugh.
widely seen as a clone of Snapchat Acton, another source said Koum was Acton, for his part, is trying to look
Stories. sailing on a yacht in the Mediterranean, forward. Besides Signal, he’s put $1 bil-
By then, three years since the deal, far away from everything. He could not lion of the Facebook proceeds into his
Zuckerberg was growing impatient, be reached for comment. philanthropic arms, to support healthcare
Acton says, and he expressed his frustra- in impoverished areas of the U.S. as well
tions at an all-hands meeting for What- IF WALKING AWAY FROM $850 MILLION as early childhood development. He also
sApp stafers. “he CFO projections, feels like penance, Acton has gone fur- says he’s determined to raise his kids nor-
the ten-year outlook—they wanted and ther. He has supercharged a small mes- mally, from public schools to that Honda
needed the WhatsApp revenues to con- saging app, Signal, run by a security re- minivan to a (relatively) modest house.
tinue to show the growth to Wall Street,” searcher named Moxie Marlinspike with Acton notes, however, that it’s just one
Acton recalls. Internally, Facebook had a mission to put users before proit, mile away from Zuckerberg’s compound.
targeted a $10 billion revenue run rate giving it $50 million and turning it into Extreme wealth, it seems, is “not as liber-
within ive years of monetization, but a foundation. Now he’s working with the ating as you would hope.” F




34 | FORBES ASIA OCTOBER 2018



FORBES ASIA
BEST U.S. COLLEGES









America’s Top Colleges







We looked for low student debt, high postgrad salaries, high graduation
rates, proven career success and strong student satisfaction. For the
full list of 650 U.S. schools, go to forbes.com/top-colleges.


EDITED BY SUSAN ADAMS AND CARTER COUDRIET
WITH REPORTING BY GWEN AVILES, QUANZHI GUO, TIA NANJAPPAN AND AISHA POWELL































1
HARVARD UNIVERSITY
Cambridge, MA
9,915
$69,600
5%





2 4 6
RANK
SCHOOL YALE UNIVERSITY MASSACHUSETTS CALIFORNIA INSTITUTE
INSTITUTE OF OF TECHNOLOGY
LOCATION New Haven, CT TECHNOLOGY Pasadena, CA
ENROLLMENT 1 5,472 Cambridge, MA 979
ANNUAL COST 1 $71,290 4,524 $68,901
ACCEPTANCE RATE 1 6% $67,430 8%
8%

















3 5 7
STANFORD UNIVERSITY PRINCETON UNIVERSITY UNIVERSITY OF
PENNSYLVANIA
Stanford, CA Princeton, NJ
Philadelphia, PA
7,034 5,400 11,716
$69,109 $66,150 $71,715
5% 7% 9%


SEPTEMBER 30, 2018 FORBES | 36

The Paper Chase




A reporter’s guide to inding top U.S. colleges that
can accommodate those Asian students who are not
members of the global inancial elite.

BY QUANZHI GUO
LIKE MANY inancially strained sions for U.S. citizens, and more
international students who look than 60 promise to meet the
to the U.S. for the best education, demonstrated inancial need of
I had to think twice about apply- accepted students. Coming from
ing for inancial aid because China, I faced a much tougher
doing so lowers the chance for challenge. he ive need-blind/
admission. Among more than full-need schools are among the
4,000 degree-granting institutions toughest in the world to get into.
in the U.S., there are actually only For example, Harvard took only
ive four-year colleges that are 4.59% of those who applied for
truly need-blind for international the class of 2021, and only 12%
students: Harvard, Yale, Prince- come from outside the U.S. Our reporter earned her degree at Colgate University in New York
ton, MIT and Amherst. he competition at many State, thanks to the school meeting all of her financial aid needs.
At these schools, the policy has schools that take need into ac-
every option, I would not be able or interests. he application is
two crucial parts. First, your ability count was just as tough. While
to aford an American educa- usually separate and very selec-
to inance your education does not colleges work to maintain a
tion at many top schools. In the tive. For example, Harvey Mudd
impact your chance to be admit- balance of international versus
end, I decided not to apply to College ofers the FIRST Robot-
ted. Second, the schools guarantee domestic students, the pool
some schools because of their ics Scholarship, Babson College
that the inancial aid they grant of international applicants is
aid policies. But in research- ofers the Center for Women’s
will be based entirely on need becoming larger and more
ing colleges, I found that in the Entrepreneurial Leadership
rather than merit, and they will competitive, not just in terms
non-need-blind camp, there Scholarship, and Wesleyan Uni-
make sure they give you enough of application materials but also
are a handful of schools that versity ofers the Freeman Asian
aid to inance your education. In with regard to inancial backing.
meet full demonstrated need for Scholarship, which covers four
that respect, their policy is even According to a recent story by
admitted students despite being years of tuition and fees for stu-
better than need-blind. Caixin, a Beijing-based inan-
need-aware or need-sensitive in dents from 11 Asian countries.
In addition to these need- cial news organization, Chinese
admissions. In other words, if Foreign students can consider
blind schools, there are Cornell students are spending an aver-
you get admitted and request aid, another option. While the price
and Georgetown. hey extend age of $100,000 a year to study
they will grant you it (though tag for U.S. education contin-
their need-blind admissions overseas, totaling $56 billion.
sometimes they underestimate ues to increase, Germany has
policies to international students hat’s a staggering sum when
students’ needs). abandoned tuition fees for both
but do not meet the full dem- you consider that the average an-
hese schools include Dart- domestic and international stu-
onstrated need of international nual household income in China
mouth College, University of dents altogether. And in many
students admitted. Cornell states is $10,220. Still, I knew that re-
Pennsylvania and the University other countries, especially in
that “due to our limited funds questing aid would signiicantly
of Chicago. Many liberal arts col- Europe, the cost of education is
we cannot provide funding to all lower my chances.
leges also belong to this bracket heavily subsidized by the state
admitted international students Several more inancial
and can be more generous. For for all students.
that demonstrate inancial need,” hurdles confront international
example, Swarthmore College, My American education did
while Georgetown says it has “a students. We are not eligible for
Colgate University, Davidson not end up being an impossible
very limited number of need- federal student loans, the main
College, Vassar College and dream thanks to the generous
based scholarships.” he cruel source of aid for most U.S. stu-
the University of Richmond support of my alma mater, Col-
reality: You are admitted but dents. In addition, due to visa re-
are committed to meeting full gate, which admitted me even
cannot go to your dream school quirements, of-campus jobs (at
demonstrated inancial need of though I needed inancial aid
because your request for inan- least those that don’t pay under
all admitted students, including and then met 100% of my inan-
cial aid is rejected. the table) are only available to
those from outside the U.S. cial need for four years. hat
It boils down to the fact that those who have completed one
Need-based inancial aid is gave me the privilege to pursue
U.S. students have far more op- full academic year and who have
not the only hope. Many schools work based on my interest rather
tions than international kids. Ac- a qualifying economic hardship
and organizations ofer limited than being shackled by crippling
cording to a survey of 1,100 col- or an emergent circumstance.
scholarships to international loan obligations.
leges by U.S. News, more than 30 It was a tough decision, but
students based on merit, region I was among the lucky few. F
colleges ofer need-blind admis- I knew that even if I exploited
OCTOBER 2018 FORBES ASIA | 37

FORBES ASIA
BEST U.S. COLLEGES





8 10 12

BROWN UNIVERSITY DUKE UNIVERSITY GEORGETOWN
Providence, RI Durham, NC UNIVERSITY
6,926 6,609 Washington, D.C.
$71,050 9 $71,764 7,453
9% 11% $71,580
DARTMOUTH 17%
COLLEGE
Hanover, NH
4,310
$71,827
11%
11 13
WILLIAMS CORNELL UNIVERSITY
COLLEGE Ithaca, NY
Williamstown, MA 14,566
2,093 $70,321
$70,650 14%
18%






18

UNIVERSITY OF
14 CHICAGO
UNIVERSITY OF Chicago
CALIFORNIA, BERKELEY 6,001
Berkeley, CA 16 $75,735
29,310 8%
AMHERST
$65,003 COLLEGE
17% Amherst, MA
1,849
$71,300
14%



15
COLUMBIA
UNIVERSITY IN THE 19
CITY OF NEW YORK 17 POMONA COLLEGE
New York City
BOWDOIN COLLEGE Claremont, CA
8,124 1,563
Brunswick, ME
$74,199 1,806 $69,725
7% 9%
$68,070
15%

22
20 UNIVERSITY OF 24
NORTHWESTERN MICHIGAN–ANN ARBOR
UNIVERSITY Ann Arbor, MI SWARTHMORE COLLEGE
Evanston, IL 28,983 Swarthmore, PA
8,791 $62,176 1,543
$72,980 29% $68,846
11% 13%










21 23 25
UNIVERSITY OF HARVEY MUDD JOHNS HOPKINS UNIVERSITY
NOTRE DAME COLLEGE
Baltimore, MD
Notre Dame, IN Claremont, CA 6,042
8,530 842 $69,863
$69,395 $74,428
13%
19% 13%

Purdue’s Bold Plan




Mitch Daniels wants to make college more
a ordable and increase his university’s
enrollment. Higher-ed purists are aghast.

BY SUSAN ADAMS
WAITING FOR Mitch Daniels to ernment allotted land and funds
pick up a call to his oice in West to universities that would teach
Lafayette, Indiana, you hear a re- agriculture and the mechanical arts
cording of Purdue’s marching band to working-class Americans.
followed by a hard-to-believe state- Daniels believed Purdue wasn’t
ment: “Purdue has frozen tuition fulilling that mission. “he only
at 2012 levels through 2019 for all costs that have outrun healthcare
undergraduate students.” in the last three decades are college
Daniels, the president of In- tuition, room and board,” he says.
diana’s lagship public university, His solution: Freeze student costs it’s the student-loan program. With So far, so good. Applications
then gets on the phone and says at 2012 levels. Purdue’s admissions ISAs, the risk shits entirely to the are up 67% since Daniels became
something even more startling: In stafers balked. “I said, ‘Look, I just lender,” since grads who don’t ind president. Enrollment is at an all-
inlation-adjusted dollars, Pur- landed here on Mars, and I can tell work pay nothing. time high, as are alumni donations,
due costs $4,000 less per year for you that the people back on Earth Daniels’ third bold move invited graduation rates and the number
out-of-state students than it did think college costs too much.’ ” the most criticism from higher-ed of startups launched by Purdue
when he took the job in 2013. Attacking afordability from an- purists. Last year he paid $1—yes, researchers. Purdue also ranks
In-staters pay nearly $3,000 less, at other angle, in 2016 he introduced a dollar—to acquire the belea- No. 126 on Forbes’ list of America’s
just under $23,000 this academic income-share agreements. Students guered for-proit, largely online top colleges, up from No. 143 last
year for tuition, room, board and who exhaust federal loans can fund Kaplan University from former year. While other institutions are
expenses. their education with an agreement Washington Post owner Graham cutting tenure-track jobs, Purdue
Back in 2013, Daniels, now 69, to sign over a share of their future Holdings Co. Purdue instantly has added 75 tenured engineering
dashed hopes that he would run income, usually between 3% boosted its enrollment by 30,000 professorships and increased the
for the Republican presidential and 5% for up to ten years ater Kaplan students—most of whom number of students earning STEM
nomination, signing on at Purdue they graduate. (Repayments are are female, between the ages of degrees by 33% (minorities are up
instead ater two terms as Indiana’s capped at 2.5 times initial costs.) 30 and 60, and the irst in their 50%).
popular moderate GOP gover- Critics hate ISAs because they’re families to go to college. hey are hen there’s Boiler Gold, a crat
nor—and setting out to ix the bro- unregulated and untested. Milton now working toward degrees at the beer on which Purdue’s hops and
ken business of higher ed. His irst Friedman is said to have invented newly named Purdue Global Uni- brewing analysis lab is collaborat-
priority: make good on Purdue’s the idea but famously noted that versity. Ater Purdue covers operat- ing with a local brewer. “It started
mission as a land-grant university, they were “economically equivalent ing costs and collects $50 million in as a research project,” says Daniels,
a designation dating back to the . . . to partial slavery.” Daniels says, tuition, Kap lan is entitled to 12.5% “and now we can’t make the stuf
Civil War, when the federal gov- “If you want indentured servitude, of Purdue Global’s revenue. fast enough.” F



BEST VALUE SCHOOLS THE MOST GRATEFUL GRADS
These universities score well on net price, net student debt, alumni earnings, How to measure college ROI: Find the schools with the alumni who give back in droves.
timely graduation, school quality and access for low-income students.
For public institutions, we used in-state tuition. To see the full list of 7-YEAR MEDIAN 3-YEAR 2018
Best Value Colleges, go to forbes.com/best-value-colleges. DONATIONS PER AVERAGE ALUMNI GRATEFUL
COLLEGE STUDENT PARTICIPATION GRAD INDEX
1 DARTMOUTH COLLEGE $24,039 41.3% 99.81
1 2 3 4 5
UNIVERSITY OF UNIVERSITY OF BRIGHAM UNIVERSITY OF UNIVERSITY OF 2 WILLIAMS COLLEGE 23,434 47.8 99.77
CALIFORNIA, CALIFORNIA, YOUNG CALIFORNIA, WASHINGTON–
LOS ANGELES BERKELEY UNIVERSITY IRVINE SEATTLE 3 PRINCETON UNIVERSITY 23,536 40.5 99.67
Los Angeles Berkeley, CA Provo, UT Irvine, CA Seattle 4 AMHERST COLLEGE 21,354 45.1 99.38
TUITION2 $14,170 $5,460 $13,738 $10,974
$13,261 5 DAVIDSON COLLEGE 19,994 44.5 99.05
6 CLAREMONT MCKENNA COLLEGE 22,776 33.8 98.8
6 7 8 9 10
HARVARD STANFORD PRINCETON UNIVERSITY OF AMHERST 7 HAVERFORD COLLEGE 19,810 38.1 98.68
UNIVERSITY UNIVERSITY UNIVERSITY CALIFORNIA, COLLEGE TOP: TIMPANNELL FOR FORBES
Cambridge, MA Stanford, CA Princeton, NJ SAN DIEGO Amherst, MA 8 WELLESLEY COLLEGE 16,328 49.0 97.79
$48,949 $49,617 $47,140 La Jolla, CA $54,310 9 WABASH COLLEGE 19,850 31.4 97.78
$14,018
10 UNIVERSITY OF NOTRE DAME 17,472 35.5 97.64
1Enrollment is total number of undergraduates. Annual cost is the estimated total cost of attendance for out-of-state students living on campus in 2017–2018.
2Tuition is for the 2017–2018 academic year. Source: National Center for Education Statistics.
OCTOBER 2018 FORBES ASIA | 39

SPECIAL ADVERTISING SECTION





THE PHILIPPINES



BUILDING ON STRONG AND STEADY GROWTH




Solid fundamentals and domestic demand continues to bolster the Philippines'
position among Southeast Asia’s dynamic economies.






Charting a steady course, the Philippine country’s first roll-on, roll-off container barge hub, the world-class structure has increased
economy has been growing by at least 6% terminal. This is integrated with other major the airport’s capacity to 12.5 million passen-
every year for the past six years straight. This port facilities, including its flagship Manila gers annually.
year continues that trend, with gross domes- International Container Terminal (MICT), Buoyed by increasing tourist arrivals and
tic product expanding by 6.6% in the first which now can handle the world’s largest sky-high occupancy rates at its Solaire Resort
quarter of 2018. container ships thanks to its new Neo-Pan- in Manila’s Entertainment City, Bloomberry
Manufacturing, services, trade, capital for- amax cranes. Resorts is working on its second integrated
mation, government and consumer spend- “We’re ready for the era of super-sized property in Quezon City, north of Metro
ing have been the economy’s main drivers. ships. Combined with our unparalleled cus- Manila.

Among sectors, industry surged by 7.9% tomer focus and highly trained staff, the new Ground has been broken at Clark Green
in the first quarter, compared with 7.3% in cranes allow MICT to further boost its already City, the master-planned sustainable city
the year-earlier period, while services ticked efficient turnaround times,” says Christian envisioned to decongest Metro Manila. Cur-
up by 7%—establishing that the country’s Gonzalez, ICTSI global corporate head. rently under construction is the PHP1.78 bil-
manufacturing base is on the right path for The investment community is also opti- lion (US$33 million) Clark Green City Govern-
industrialization. Meanwhile the entry of new mistic about the country's continued growth. ment Center, the PHP850 million (US$15.8
telecommunications players is expected to Says Frederic DyBuncio, the president and million) Clark Commercial Center and the
improve the communications, trade and chief executive officer of SM Investments PHP3.33 billion (US$61.3 million) Clark Mixed-
information technology sectors. Corp: “We believe investment in the area of Income Housing.
infrastructure is still growing and large proj-
Infrastructure Boom ects have yet to be launched. With more effi - Sustainable Growth

Helping to reinforce the Philippines as a solid cient infrastructure, we will bring our com- The Asian Development Bank says the Philip-
investment destination, the Philippine gov- petencies in retail, property, banking and the pines remains on a "healthy trajectory," pro-
ernment has boosted infrastructure spend- rest to support the country’s development by jecting growth of around 6.8% this year. More
ing, with President Rodrigo Duterte’s “Build, pursuing aggressive expansion beyond the importantly, growth has been accompanied
Build, Build” program stimulating not just Philippines’ key cities.” by a decline in poverty rates.
public construction but private develop- The country’s total trade grew by 13.5%,
ments as well. New Developments reaching US$14.8 billion in June 2018. With
In coordination with the Department The new international terminal at the Mac- government measures encouraging invest-
of Transportation, International Container tan-Cebu International Airport opened this ment along with improved labor market con-
Terminal Services, Inc. (ICTSI) has built the July. Serving the country’s second-largest ditions, the Philippine economy is expected
US$30 million Cavite Gateway Terminal—the metropolis and a major business and tourism to sustain growth.


Photo credit: Eric Beltran





























Makati Skyline
1 The Philippines



SPECIAL AD VER TISING SEC TION
SPECIAL ADVERTISING SECTION




AYALA LAND PREMIER:


GROWING ITS REACH,


STRENGTHENING ITS LEAD





Ayala Land Premier expands to new geographies and product formats,
solidifying its position as the country’s leading luxury developer.













































Park Central Towers


Ayala Land Premier (ALP), the luxury arm proven long-term value, making for a multi- vast park system, taking full advantage of
of leading Philippine real estate developer generational investment. the picturesque terrain. Defining luxury low-
Ayala Land Inc., has continued to enjoy ALP’s most successful offerings range from density development, 50% of the estate’s
impressive growth across its entire portfolio. sleek towers in sophisticated central busi- land area is dedicated to open space.
In the first six months of 2018, ALP posted ness districts (CBDs) to verdant estates in the
sales growth of more than 40%, compared scenic countryside. In the modern, bustling Forging Onward and Ahead
with the year-earlier period, and is expected CBD of Makati City, ALP’s Park Central Tow- The coastal city of Davao has emerged as a
to breach the PHP40 billion (US$769.2 million) ers soars with two towers of well-appointed major growth center in the southern Philip-
mark in sales for the financial year. This brisk luxury standing on an ultra-prime address. pines. ALP’s parent company, Ayala Land, has
take-up points to steadily increasing demand Arca South is Metro Manila’s most prom- been an active partner in the city’s develop-
for luxury residences in the Philippines. Far ising new growth center. The transport-ori- ment by investing in mixed-use, master-
from resting on its laurels, ALP is using this ented estate features seamless connectivity planned, sustainable estates. Its Azuela Cove
impressive momentum to make headway to established CBDs, such as Bonifacio Global is envisioned as Davao’s newest seaside life-
into new areas and product formats. For this City and Makati, and the booming Calabar- style hub, with a full range of facilities and
year, its latest launches are valued at more zon region. Here, ALP is at work on Arbor amenities from retail to leisure. This includes
than PHP45 billion (US$865.3 million), and Lanes, a mid-rise residential enclave woven the first St. Luke’s Medical Center, managed
ALP still sees steady demand for established into lush gardens that provide an urban oasis by the world-class hospital group, outside of
projects. in this rising district. Metro Manila.
The developer’s strengths lie in its consis- South of the metropolis, ALP highlights The Residences at Azuela Cove is ALP’s first
tency in delivering distinctive living experi- nature-centric living in Cerilo, its newest residential project in the estate. The exclusive
ences in the most strategic locations. Its development in the award-winning, master- luxury property focuses on low-density liv-
projects have unfailingly evolved into the planned, eco-community of Nuvali. In this ing, with expansive spaces and unbeatable
country’s most desirable addresses with green haven, 80% of homes open up to a sea views. A limited selection of 147 all-suite


3 The Philippines

SPECIAL ADVERTISING SECTION
































The Residences at Azuela Cove Arbor Lanes

residences are spread across two mid-rise City-Pasig corridor. Located along Circum- “The enduring appreciation and increasing
towers. Every unit boasts unobstructed views ferential Road-5 (C-5) and close to Ortigas demand for our luxury properties is a testa-
of Davao Gulf and Samal Island, and features Avenue, 40% of the mixed-use estate’s 35 ment to Ayala Land’s vision,” says Mike Jugo,
large balconies and verandas offering up to hectares will be dedicated to an extensive ALP’s managing director. “It also proves that
68 square meters of space. The Residences’ network of interconnected parks, with an we have only begun to take advantage of
first tower sold out a week after launch, iconic bridge as a focal point. This will be the opportunities provided by the country’s
underscoring both the strength of the prod- integrated with an Ayala Mall and a sprawl- growth. By delivering one-of-a-kind experi-
uct concept and the immense demand for ing civic space fronting the river. The project ences, and exploring fresh locations and
luxury properties in the regional capital. will be the first luxury tower in this upmarket concepts, we are raising new standards of
Next to Manila, Quezon City is the Philip- area of exclusive residential neighborhoods development in an extraordinarily dynamic
pines’ former capital and largest city. It hosts and prestigious educational institutions. market.”
key government offices, institutions and The Philippines’ future aerotropolis and
universities, but lacks premium-grade office government center is taking shape in Central
space for sale. ALP addresses this demand Luzon, north of Metro Manila. Ayala Land is
with One Vertis Plaza, its very first premium- expanding to this growth area with Alviera,
grade office development. The building is an 1,800-hectare estate in Porac, Pampanga.
centrally located within Vertis North, devel- The future sprawling economic and lifestyle
oped by Ayala Land. The accessible district estate complements the growth of infrastruc-
serves as the gateway to the burgeoning ture in the area. Its proximity to Clark Inter-
north, with links to major thoroughfares such national Airport and the nexus of the NLEX,
as EDSA, North Avenue and the North Luzon SCTEX, and TPLEX highway systems renders it
Expressway, the MRT and LRT lines, and the a gateway to the region and beyond. Along-
planned Metro Manila subway system. side the vibrant Alviera Country Club, ALP will
One Vertis Plaza will stand as the busi- launch an exclusive residential neighborhood
ness address of choice in this vital urban featuring expansive spaces within a low-den-
hub. Equipped to handle major locators and sity setting to last for generations.
regional headquarters, its flexible unit sizes
can go up to 325 square meters, or 1,500
square meters for an entire floor. Innova-
tive eco-friendly features include the use of
low-emissivity glass, a variable refrigerant
flow air-conditioning system and a cutting-
edge, high-efficiency elevator system. The
green extends from inside to outside with
the two-hectare Vertis Gardens park at the
heart of the estate. The project has already
seen strong take-up, with buyers ranging
from industrial and manufacturing to food
and pharmaceutical companies.

Brilliant Plans Made Real
Parklinks is Ayala Land’s first large-scale
growth center in the strategic Quezon Parklinks Bridge and the River Esplanade One Vertis Plaza and the Vertis Gardens


The Philippines 4

SPECIAL AD VER TISING SEC TION
SPECIAL ADVERTISING SECTION




SM INVESTMENTS CORPORATION:


ENERGIZING LOCAL ECONOMIES




The Philippine holding company remains aggressive as ever—sustaining market leadership in

its core businesses of property, banking and retail, while delivering more value to shareholders
with strategic investments in high-potential areas.
































SM Aura Premier Conrad Manila Wind Residences






























THE SM STORE BDO


This year marks the 60th anniversary of The current year is showing sustained According to SM President and Chief
visionary tycoon Henry Sy Sr. founding the momentum, with net income increasing 9% Executive Officer Frederic DyBuncio, the
shoe store that would evolve into one of the in the first half to PHP18.1 billion (US$348.3 Philippines’ steady economic environ-
Philippines’ most agile conglomerates, SM million) from the same period last year ment and its demographic make-up spells
Investments Corporation (SM) is showing no and consolidated revenue rising 12% to a wealth of market opportunities for the
signs of slowing down. PHP204.9 billion (US$3.9 billion). About 45% conglomerate, whose plans are not only
The holding company, whose diverse of current total earnings is attributed to to extend its presence in Metro Manila but
business interests cover market-leading property arm SM Prime Holdings, while its also to expand into underserved areas in the
investments in retail, property, banking and banking businesses BDO Unibank (BDO) and country.
other high-potential sectors, delivered solid China Banking Corporation (China Bank) “We are focused on sustaining our growth
numbers in 2017, with consolidated revenue contributed 33%. SM Retail contributed and delivering more value through our
of PHP396.1 billion (US$7.9 billion), up 9% 22%, driven by particularly strong results growing interests in our core businesses and
year-on-year, and consolidated net income and high-margin growth from specialty strategic investments that will accelerate
of PHP32.9 billion (US$652.7 million). retailing. expansion for the group,” says DyBuncio.


5 The Philippines

SPECIAL ADVERTISING SECTION





Delivering Shareholder Value billion (US$557.5 million) while China Bank these investments to fuel higher growth in
SM is further energized to increase nation- registered consolidated net income of 2018 and should complement solid returns
wide penetration by integrating more PHP7.5 billion (US$148.8 million)—anchored across the group. We intend to help them
investments into its core businesses. “We on sustained network expansion, focused grow and to look for more emerging sector
continue to invest in opportunities to cre- customer service and robust business investment opportunities like these.”
ate value and growth,” says DyBuncio, add- strategies. Amid aggressive growth plans, 2017 also
ing that the company’s total assets grew by Beyond the organic growth of its core marked strategic transitions in SM’s top lead-
11.4% to PHP960.1 billion (US$19.04 billion) businesses, DyBuncio says, “We’re always on ership, with DyBuncio succeeding as presi-
in 2017. the lookout for growth opportunities and dent and Jose Sio as chairman. In a message
Even amid the Philippines’ inflationary ensure we constantly innovate to keep up to SM’s shareholders, founder and Chairman
concerns, the SM group continues to see with the ever-changing market. We keep our Emeritus Henry Sy Sr. affirms the movement
retail and property among the brightest ears close to the ground and transform with “further enhances professionalization within
spots in the Philippines, opening seven the changing marketplace.” the group in preparation for the future,” and
new malls outside Metro Manila, two THE Further bolstering expansion have been that as the conglomerate journeys toward
SM STOREs, four SM Supermarkets, 28 Save- equity investments in high-growth potential its centennial, he remains “optimistic about
more stores, three SM Hypermarkets, seven companies, including a 30.5% stake in lead- the medium- and long-term growth poten-
Walter Mart stores and 159 specialty stores ing Philippine end-to-end logistics solutions tial of SM through investments in addition
in 2017. Retail revenue grew 7.3% last year provider 2GO Group and a 61.2% holding in to the company’s core businesses.”
to PHP297.4 billion (US$5.9 billion), while dormitory provider to young urban profes-
property grew by 13.9% to PHP90.9 billion sionals, Philippines Urban Living Solutions.
(US$1.8 billion) on the back of strong resi- “These companies cater to huge and
dential sales and increased mall revenue. underserved customer bases, offering dif-
Both BDO and China Bank also recorded ferentiated business models, competitive
exceptional achievements last year—BDO advantages and strong synergies with our
posted a record net income of PHP28.1 businesses,” says DyBuncio. “We expect www.sminvestments.com






























China Bank SM Markets





























FiveE-com Center Field Residences SM City Puerto Princesa


The Philippines 6

SPECIAL ADVERTISING SECTION





UDENNA GROUP:


STRIKING WHILE THE IRON IS HOT






Powered by the country’s infrastructure boom, the rm behind Clark Global City is taking the lead in
expanding development and innovation outside the crowded Philippine capital.










































Aeropark Building within Clark Global City




Development momentum across the Phil- efforts away from such CBDs as growth pains avoiding Metro Manila’s urban development
ippines has been on the upswing as the are negatively impacting business opera- mistakes.

country’s top property firms, fueled by the tions and productivity.” Earlier this year, the “As individuals and companies are being
infrastructure boom brought on by Presi- Japan International Cooperation Agency driven out of Manila due to lack of space and
dent Rodrigo Duterte’s clarion call to “Build, released estimates that Manila’s worsening incentives, expensive real estate and dete-
Build, Build,” expand their presence into sec- traffic is costing the capital PHP3.5 billion riorating quality of life, we’re ensuring that
ondary markets outside the greater Metro (US$65.5 million) in lost opportunities daily. such impediments are addressed early on,”
Manila area. Clark Global City seeks to alleviate such Placino says.
Among the leading conglomerates rais- issues. It is strategically located in Central Developed with sustainability in mind,
ing the stakes is Udenna Group, which Luzon, an hour away from Metro Manila but Clark Global City will feature prime office
recently acquired a 177-hectare prime prop- still within close proximity to the aggressive buildings, upmarket retail clusters, leading
erty development within the Clark Freeport road expansion and big-ticket infrastructure academic and sports centers, an urban
Zone in Mabalacat, Pampanga. Touted as projects of the government, including Clark park, an iconic tower, and a hotel and

the “new center of business, life and innova- International Airport, the PNR North Railway, casino—all topped off with modern support
tion” in the Philippines, Clark Global City is the Subic-Clark Cargo Railway Project, New services and lifestyle amenities. Among
master-planned to be a thriving community Clark City and the North and South Luzon the inspirations for the master plan are

that offers local and international companies Expressway Connector Road. thriving cities such as Chicago, Hong Kong,
an alternative business and innovation cor- There are two fully leased, world-class Korea’s aerotropolis city of Songdo and the


ridor outside the capital with its escalating office buildings in its West Aeropark—with progressive city of Dubai.
problems of traffi c and congestion. three more already under construction—and “The possibility of a better future is a key
Currently most financial institutions and a 173-bed hospital under The Medical City aspect that attracts employees and compa-

multinationals are located within the lead- brand. While these alone make Clark Global nies to such cities. When it comes to inno-
ing central business districts of Makati and City the ideal location for the country’s next vation, Clark Global City is focused on areas


Bonifacio Global City, but Wilfredo Placino, CBD, Placino dishes out a vital impetus to that improve business efficiency and quality
president of Clark Global City, emphasizes attract both investors and the country’s of life for those who live and work within it,”
the “critical need to redirect development talented workforce to the innovation hub: Placino says.


7 The Philippines



SPECIAL ADVERTISING SECTION





PHILIPPINE PROPERTY FLIES HIGH




Skyrocketing demand is putting the Philippines on the region’s real estate forefront.








































Rental rates in Bonifacio Global City, Metro Manila remain among the most competitive in Asia.

While the country's economy moves at a In ux of Investments Vista Land Chairman Manuel Villar Jr.,
more settled pace, the Philippine real estate While Filipino overseas workers have tradi- whose property firm ended 2017 with
sector is still surging to impressively giddy tionally driven real estate sales, international almost 400,000 homes built across the Phil-
heights. buyers are now increasingly snapping up ippines in 133 cities, also remains bullish on
The development momentum is pal- properties, particularly for the mid-range the country’s real estate segment. “There’s
pable in the capital of Manila, which boasts segment and up. Local developers have robust demand for our residential business,
the third-lowest vacancy rate among the 20 reaped major earnings by partnering with and sustained growth in our leasing busi-
prime office markets in the region. Estab- foreign firms to tap this market. This strong ness. This is propelled by the steady rise
lished business districts such as Makati showing extends to leasing in the secondary in Filipinos’ disposable income, overseas
and Bonifacio Global City are practically market, with major business districts posting Filipino remittances, sound macroeco-
saturated, thanks to growth in outsourcing low vacancies across segments. nomic fundamentals and the government’s
and online gaming locators. Rents continue Affluent locals are investing in luxury drive to accelerate economic activities and
to rise backed by strong leasing activity. properties as a hedge against stock market infrastructure development outside Metro
Property consultancy Colliers International volatility. The Bangko Sentral ng Pilipinas Manila,” says Villar.
expects demand to increase by about 6% Residential Real Estate Price Index indi- As the country evolves, it has repeatedly
annually over the next three years, while cates condominium prices in Metro Manila proven that opportunities abound, and it is
Knight Frank projects that by 2020, Manila rose 3.3% in the first quarter of 2018 from likely we are still just on the ground floor of
will post 19% growth in prime office rents, a year earlier. Upward mobility and popu- its ascent.
overtaking Bangkok, Brisbane, Hong Kong lation shifts are also expanding the num-
and Singapore. ber of end-users for premium residential WEB DIRECTORY
Growth in emerging areas has sped up, properties.
Ayala Land Premier
attracting corporates on the lookout for Ayala Land’s market-leading luxury brand
www.ayalalandpremier.com
competitive alternatives to Manila. “Top Ayala Land Premier has been riding this
developers are investing in Northern and momentum, posting one of its strongest International Container Terminal
Services, Inc. (ICTSI)
Central Luzon, developing commercial sales figures in 2017 at more than PHP37
www.ictsi.com
centers, industrial parks and townships, all billion (US$686.5 million). “With luxury
of which are projected to appreciate due property prices in the Philippines relatively SM Investments Corporation
www.sminvestments.com
to the aggressive road expansion plans of affordable compared to its Southeast Asian
the Philippine government,” says Wilfredo counterparts, the premium and luxury seg- Udenna Group
Placino, president of Clark Global City, a ment provide solid value in terms of invest- www.udenna.ph
massive 177-hectare “center of innovation” ment,” says Mike Jugo, head of Ayala Land Vista Land & Lifescapes, Inc.
developed by Udenna Group. Premier. www.vistaland.com.ph


9 The Philippines