Charm Hoi-sang (湛海生)and Harbour Engineering and Hoi Sing Holdings

June 7, 2021 York Lo Articles

York Lo: Charm Hoi-sang (湛海生)and Harbour Engineering and Hoi Sing Holdings

Reclamation and the other water-related construction work such as the building of piers, reservoirs, pumping stations and seawalls have been an important part of the construction business in HK. Charm Hoi-sang, whose name contained the Chinese character for sea, was a key figure in this aspect of the industry as the founder of two listed companies – Harbour Engineering and Hoi Sing Holdings, which went public in 1973 and 1992 respectively.

Harbour Engineering (海港工程有限公司)

Left: Charm Hoi-sang (left) and John Mackenzie at the listing of Harbour Engineering on the Kowloon Stock Exchange in March 1973 (WKYP, 1973-3-28); Right: Charm Hoi-sang and the overpass next to the new Hunghom train station built by Harbour Engineering in 1973(WKYP, 1973-8-7)

A native of Gaozhou in southwestern Guangdong province, Charm was born in 1928. He entered the construction industry in the 1940s but also continued to study while working, earning a B.A. from James Martin Theological Seminary and Collegeand aD.C.L. from the International Free Protestant Episcopalian University in 1965 and M.A. and D.Sc from Sussex College of Technology in 1966 and 1969. (International Who’s Who in Community Service, 1973)

In 1965, Charm founded Harbour Engineering Co Ltd (hereafter referred to as Harbour) and operated out of the 9^th floor of 499 Nathan Road in the late 1960s. By the early 1970s, the firm had secured Group C contractor statusto bid for water supplies and harbor reclamation work of large value from the Department of Public Works and securedthe Hutchison group as a strategic investor, which held its shares through Hutchison International and its engineering division Hutchison Boag.As a result, John Mackenzie who ran Hutchison Boag which included the trading firm of Davie Boag (德惠寶) and many others covered earlier such as Faithful Trading (equipment distributor), Far East Motors (car dealers), Canton Brothers (rubber shoes) and Morlite (metal windows) served as chairman of Harbour and Davie Boag director H.S. Woo (吳學先), a former NCR executive who was responsible for its distribution of Westinghouse and GE appliances was also on the board of Harbour while Charm ran the day to day operations of the firm as vice chairman and managing director.

In February 1973, Harbour acquired 25% of Peninsula Engineering & Equipment (半島機械工程,incorporated in 1971 and dissolved in 2013) which jointly sold rail cars to KCR with the Japanese trading giant C. Itoh. The firm also bought 9.5% of Electro-Mechanical (Equipment) Ltd (電機工程有限公司, incorporated in 1966) which distributed heavy construction equipment and did the electrical work for the Holiday Inn, Hutchison House and the Sheraton Hotel, the latter two being projects connected with Hutchison. George Ko (高德賢) who ran Electro-Mechanical and was later chairman of the HK Electrical Contractors Association also served on the board of Harbour.

In March 1973, Harbour went public on one of its directors Peter Chan’s Kowloon Stock Exchange. The firm was later listed on Far East and HK Stock Exchange in 1974. (KSDN, 1974-8-8)

In May 1973, Harbour began construction of a new pier in Pak Sha Wan. (WKYP, 1973-5-3) In June 1973, Harbour received a 2 year, HK$6 million contract for reclamation in Gin Drinkers Bay in Kwai Chung using the control tipping method which involved dumping 6 feet of garbage and then adding another foot of dirt within 24 hours. This was allegedly a first in Hong Kong and the area became known as Junkyard Bay after years of reclamation. (KSEN, 1973-6-14)

By year end in 1973, Harbour was also working on pumping station for High Island Reservoir, the ramps leading up to the entrance of the new Hunghom train station, phase III of the Kowloon Bay seawall, the temporary parking lot for the Kai Tak airport, Phase III of the Ap Lei Chau power station and a reclamation contract for the Sham Shui Po pier in addition to projects listed above. The firm was also involved in property development through Harbour Engineering (Properties) Ltd with a 23-story, 69-unit residential project called Harbour Court (海港閣) in Kai Yuen Terrace, a 6-story, 12-unit residential project in Kowloon City, an industrial building in Kwun Tong and a 23-story office building on Wo Yi Hop Road in Tsuen Wan. (WKYP, 1973-12-7)

Picture and article about the ground breaking ceremony of the Air Cargo Terminal Building at Kai Tak. Left to right: Charm Hoi-sang, managing director of HACTL, Harbour chairman John Mackenzie (KSEN, 1974-3-7)

In March 1974, Harbour received a $80 million contract to build the Air Cargo Terminal Building at Kai Tak Airport as shown in the article above. For the year ending June 1974, Harbour had pretax earnings of $4.4 million and at the time had total contract value of $220 million including the Kai Tak contract mentioned above and other new contracts such as the construction of the Dow Chemical plastic plant on Tsing Yi island, the expansion of the Whampoa Dock container terminal, construction of the telephone exchange in Central for HK Telephone, the foundation and piling work for an office building for Cheung Kong on Connaught Road Central, a $60 million contract for reclamation and seawall work in Shatin and the contracts for a 54-unit residential project on Broadcast Drive in Kowloon, a 94-unit residential project in Kai Yuen Terrace in North Point and a seafood aquarium in Aberdeen. Despite of the stock market crash that year, the stock of Harbour managed to hold up well and trading at around $1.25 per share. (TKP, 1974-8-2; KSEN, 1974-6-17)

In addition to projects in HK, Harbour had a subsidiary in Sumatra to manufacture redwood for distribution locally and throughout South east Asia. In July 1974, Charm and Ng visited Medan and Jakarta in Indonesia where they had discussions with the Indonesian government and business groups on potential construction projects. (WKYP, 1974-7-9)

Charm Hoi-sang delivering a speech to the staff of Harbour Engineering at the Lo Pan Birthday celebration at the Oceania Restaurant in Tsim Sha Tsui in July 1975 (WKYP, 1975-7-26)

In April 1975, Harbour won a $11.1 million contract from the Water Supplies department for the construction of pumping stations in Pak Tam Chung and Tai Mong Tsai in Sai Kung which were expected to be completed within 13 months. (WKYP, 1975-4-2)In 1975, Harbour was also involved in reservoir projects in Shatin and Pokfulam, seafloor cleaning project in Central, construction of pumping and filtration stations at Ocean Park and construction work at 33 Connaught Road Central. The firm had also jointly bid for tunnel and station construction work for the MTR with the Japanese construction giant Nishimatsu. (WKYP, 1975-10-17)

In October 1976, Harbour won the contract for the construction of water-cooling pipes for the air conditioning system along Nathan Road in Kowloon and the HK line of the new MTR. (KSDN, 1976-10-5)

Around the same time, the Hutchison group had run into financial troubles and had hired Bill Wyllie who had successfully turned around Harpers and China Engineers (see articles on both) as its CEO in 1975. By 1976, the Hutchison group had shed 103 subsidiaries and Wyllie had a conversation with Charm about sellingthe group’s 34% stake to him in late 1976 but later decided to retain the stake and worked with him to grow the business in November. (Business Times, 1976-11-8)For whatever reason, Charm parted ways with Hutchison in 1977 and in April 1977, the Department of Public Works banned Harbour for bidding on a variety of contracts. As a result, the firm incurred losses of $20.7 million for the year ending June 1977. To keep itself afloat, Harbour issued 10 million new B shares and $5 million worth of 7.7% convertible bond to Hutchison in September 1977. Combined with 1.3 million “A” shares of Harbour Engineering acquired by Hutchison from Charm at an undisclosed price earlier in the month, Hutchison had increased their stake from 34% to 67% and effectively turned it into a subsidiary. (The Guardian, 1977-9-22; WKYP, 1977-9-30) For the year ending December 1977, the firm had losses of $6.9 million. (WKYP, 1978-3-23)

By 1978, business began to turn around. In June 1978, Harbour was awarded a $8.1 million contract for the pumping station of a water treatment plant in Tai Po (KEN, 1978-6-13) In August 1978, Harbour won a $25 million contract from the Department of Public Works for the construction of a new car ferry pier in North Point which was part of the massive $400 million Eastern Corridor project. (KSEN, 1978-8-3)

Hugo Cooper (left) of Harbour Engineering signing contract with Lee Kui, the chief engineer of the Department of Water Supplies in 1979 for the Tuen Mun reservoir contracts (KSEN, 1979-8-31)

In April 1979, Harbour was awarded a $30 million contract to construct a water-cooling system for ventilation in the MTR Tsuen Wan line. (TKP, 1979-4-4) In August 1979, Harbour won the $22.8 million contract from the Water Supplies department for the construction of two reservoirs in Tuen Mun with one for freshwater and one for seawater with capacity of 61000 cubic feet and 12000 cubic feet to be completed in 18 months and 30 months respectively. (KSEN, 1979-8-31)

For the six months ending June 1980, Harbour recorded revenues of $75 million with profits of $725,000 in profits which was an improvement from the losses incurred in the prior year. (WKYP, 1980-9-11) After Hutchison was acquired by Cheung Kong in 1981, it sold its majority stake in the listed Harbour Engineering to Vincent Lo, the founder and chairman of Shui On Group.

In August 1984, Harbour Engineering acquired the Shui On Group from its chairman Vincent Lo through the issuance of 380 million new shares. (WKYP, 1984-8-29) After the completion of the transaction, the listed entity was renamed Shui On Group in October 1984 and remained a listed company until it was privatized in November 1989.

Hoi Sing Construction (海成建築)

Left: Charm Hoi-sang (HK Scouting Gazette, 1975); Right: Charm Hoi-sang (second from left) receiving a gift from government official Augustine Chui Kam at the celebration of his receipt of MBE hosted by Tung Wah directors. Lui Chi-keung was on the left while Lau Hoi-hing was on the right (WKYP, 1978-1-21)

After Charm left Harbour, he started Hoi Sing Construction in December 1976. In 1982, Hoi Sing was awarded the contract to construct the Au Tau pumping station by the Department of Water Supplies. (Aqua, 1982)

In February 1992, Hoi Sing Holdings, the parent company of Hoi Sing Construction, became a listed company on the Stock Exchange of Hong Kong and posted earnings of $26.3 million for the fiscal year ending March 1992. For the six months ending September 1992 however, the firm reported a drop of 69% drop in earnings from the same period in the prior year to $3.8 million due to a row in project in the airport. (SCMP, 1993-1-20) By early 1993, it was involved in 16 projects with combined contract value of $660 million.

In August 1993, Shougang Concord formed Dragon Light, a 74/26 joint venture with the Charm family to acquire 52% of Hoi Sing Holdings from the Charm family. The next month, Charm Hoi-sang stepped down as chairman of Hoi Sing while his daughter Eva Cham Yee-wa and her husband Peter Fung Chung-kin (馮中健, former works supervisor for Maunsell; after Hoi Sing served as CEO of Tsun Yip and also worked for Chun Wo)both stepped down from the board and Communist princelings Deng Zhifang (son of Deng Xiaoping) and Zhou Beifang (son of Shougang chief) joined the board. Charm andhis son Cham Wai-sing who was managing director continued to serve on the board of Hoi Sing until 1995.

In 1996, Hoi Sing completed the 6-story Peng Lai Court on Peng Chau. With 32 units on each floor, it has the record of most units per floor of any Home Ownership Schemes projects.

As a firm, Hoi Sing Construction was dissolved in 2011.

Outside of work, Charm Hoi-sang was very active in community affairs, having joined the board of the Tung Wah Group of Hospitals in 1974 and served as its chairman in 1977-78. He was also the president of the Mei Sing Athletic Association (美星體育會) and Asia Society of Arts (亞洲藝術學會) with Leung Chung-lik of Swiss IceCream and Hui Check-wing of New Universal Jewelry covered earlier. In 1978, Charm received MBE from the Queen for his community services. (WKYP, 1978-1-20)

Sources (other than those cited above):

https://www.scmp.com/article/15855/airport-row-hits-hoi-sing

香港企業併購經典（增訂版）, 2017

This article was first posted on 7th June 2021.

Charm Hoi-sang (湛海生)and Harbour Engineering and Hoi Sing Holdings

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