Cheong Sun Development (昌生興業) and the Trio Behind the Firm
York Lo: Cheong Sun Development (昌生興業) and the Trio Behind the Firm
Cheong Sun Development was a notable listed property developer in the 1970s which was founded in 1972 by a trio from Shanghai (K.S. Cheng, T.O. Liu and K.L. Kung) and acquired by Far East Consortium in 1981. Most of the buildings in HK starting with the character “Cheong” in its names were developed by the firm and its affiliate Cheong Sun Investments Ltd (昌生有限公司) and the two firms had developed over 70 residential, commercial and industrial properties in HK from the 1960s to the 1980s.
Background of the Trio and Property Development before Cheong Sun Development
The trio behind Cheong Sun (left to right): K.S. Cheng, T.O. Liu, K.L. Kung
Cheong Sun Investments was incorporated in 1960 with Cheng Kwei-sheng (鄭桂生, hereafter referred to as “K.S. Cheng”) as chairman and the firm also derived its name from him as Sun and Sheng were the same character in Chinese. When the Real Estate Developers Association of HK was established in 1965, Cheng was one of its founding directors and the only Shanghainese on its board.
Shanghai native Tien-Oung Liu (劉天宏, 1914-1995, hereafter referred to as “T.O. Liu”). and Soochow native Kung Ka-luen (龔家麟, 1916-, also known as Chia-Lin Kung, hereafter referred to as “K.L. Kung”, to avoid confusion with another prominent Shanghainese businessman in HK – C.L. Kung of Kung Brothers) were roomates for four years at the prestigious Tsinghua University in the 1930s and played together in the marching band with Liu playing the French horn and Kung the clarinet. After graduation with degrees in economics in 1937, Liu did postgraduate studies at New York University and joined Central Trust (中央信託局) where he worked for 12 years at different locations while Kung went to the US to further his studies and returned to China in 1946 to join the Natural Resources Commission. (Margaret Liu, A Twentieth Century Chinese Profile) When the Communists came to power in 1949, both Liu and Kung did not follow the KMT regime to Taiwan or stayed in the mainland and instead became businessmen in HK. Liu started a small agency selling US-madeelectric fans by Emerson and later formed a partnership with Kung to import precision scientific instruments from Italy and then sold them in the mainland through an agency run by Kung’s brother in Beijing until the venture was closed down during the Korean War embargo.
Liu went into the textile business by incorporating South Asia Textiles (南方紡織) in 1957 with $1 million in capital he raised from friends and ran the factory as managing director together with Chen-Sien Wan (萬春先), who also ran Eastern Cotton Mills with Liu’s brother in law H.D. Tung (董厚璋, former manager of GE in Kunming)with the support of the Fu family. (TKP, 1956-4-10) The South Asia mill started with 200 used looms and was later sold.Liu was also a director of Smart Shirts Manufacturers, the garment manufacturer founded in 1956 that was covered earlier and served on its board until 1979 when he sold his shares to the American garment giant Kellwood.
A lifelong music lover, Kung formed Audio Supplies Co Ltd (雅典音樂器材有限公司) in HK in 1957 and became one of the leading distributors of hi-fi stereo equipment in HK representing brands such as Altec Lansing and Bogen amplifiers from the US and Lenco turntables and record players from Sweden. Outside of stereo, the firm also represented the German Braun brand of electronic appliances since its inception and was the agent for the Vorwerk brand of vacuum cleaners and juicers. (WKYP, 1982-10-16) The firm operated out of the lower arcade of the Man Yee Building in the 1960s (Shopping Around the East and Near East, 1960) but later moved to the Central Building by the 1970s. (Hong Kong $ Directory, 1970)
Article and sketch of Garden Mansion in Tsim Sha Tsui in 1957 (WKYP, 1957-7-21)
In 1957, Liu and Kung made their first foray into property development and developed the 12-story Garden Mansion (花園大廈) at 154 Austin Road in Tsim Sha Tsui. Thanks to its great location next to the Kowloon Cricket Club and several schools, the residential building was quickly sold out and Kung kept one of the 60 units for himself and lived there with his family for twenty years.
It is unclear as to when Cheng first partnered with Liu and Kung but Cheng and Liu were both founding members of the Peninsula Lions Club in 1959 along with other Shanghainese tycoons such as John Tung of I-Feng Enamelware (see article), C.K. Chang of Hwa Lee Weaving, C.W. Chu of Hwa Fu Garments, Samuel Yen of East Sun Textiles (see article), Dah Sing Bank co-founder T.T. Hsu (father of former Legco chair Rita Fan), V.L. Chang of Chekiang First Bank and C.K. Hu of Wader Studio (see article). In 1964, Cheng was elected president of the club when C.K. Hu died in a plane crash in Taiwan and he was later succeeded by Liu’s brother in law H.D. Tung in 1965. (WKYP, 1964-6-29)
Two of the Cheong Sun trio at the inauguration ceremony of the Peninsula Lions Club in 1962. Left to right: Wong Kam-wah, Wu Shou-yi, Samuel G. Yen, C.W. Chu,Henry Hu, John Tung, T.O. Liu, K.S. Cheng, T.T. Hsu, V.L. Chang, Y.C. Pi, Tung Hou-Diang. (WKYP, 1962-6-25)
Cheong Sun’s ad for Green Valley Mansion in Happy Valley in 1962 (WKYP, 1962-8-25)
One of the early projects developed by Cheong Sun Investments was the 14-story Green Valley Mansion (翠谷樓) at 51 Wong Nai Chung Road in Happy Valley shown in the ad below from 1962. The office of the firm was listed as Room 1407 of Tak Shing House in Central at the time.
Left: Cheong Sun’s ad for Wah King Building in 1965 (KSDN, 1965-10-22); Right: Joint ad by Cheong Sun and Van Fat for Van Fat Industrial Building in 1965 (WKYP, 1965-7-20)
In 1963, K.S. Cheng formed Van Fat Investment Ltd with two fellow Shanghainese developers – Teddy Wang Teh-huei of Chinachem and Hsu Ve-tsin of Ching Yee Construction (see article) and Cheong Sun and Chinachem jointly developed the Van Fat Factory Building (宏發工廠大廈) at 20-22A Ng Fong Street in San Po Kong in 1965 followed by the nearby Wing Hin Industrial Building (永顯工業大廈) at 31-33 Ng Fong Street in 1966. Also in 1965, Cheong Sun developed 10-story Grand View Mansion (華景樓) at 383-385A Queen’s Road East in Wanchai.
Ad for Tak Shun Industrial Building in Kwun Tong in 1970 (KSDN, 1970-2-20)
In 1970, Cheong Sun developed the 13-story Tak Shun Industrial Building (德信工業大廈) at 154 Wai Yip Street in Kwun Tong with 4000-5000 sq ft units. In 1971, Cheong Sun teamed up with the industrial giant Chiaphua to re-develop the latter’s former steel plant site in To Kwa Wan into the massive private housing estateOn Wo Gardens (安和園) on Mei Kwong Street and Mei King Street, which comprised of 10 blocks (On Hing, On Ping, On Cheong, On Tai, On Fook, On Shun, On Wo, On Hong, On Lung, On Ning) and 1200 units.
According to his daughter Margaret, T.O. Liu with his background in banking forged strong ties with banks which offered low interest long term loans to Cheong Sun and in return, Cheong Sun offered some of the banks favorable rent for their branches on the ground floors of their buildings.For example, the firm developed the18 story Fung Lai Building at the intersection of Nathan Road and Jordan Road in Kowloon which had Chekiang First Bank and the Yue Hwa Chinese Products Emporium as tenants on the ground floor and the 26-story King’s Towers (昌明洋樓) at the former site of the Tsang Fook Piano factory (see article) in North Point with Chekiang First Bank and Chartered Bank as tenants on the ground floor facing King’s Road. (WKYP, 1973-2-1)
By the early 1970s, Cheong Sun was operating out of Kailey Building in Central and its principals had developed over 50 properties in HK. Capitalizing on the stock market boom at the time, the trio injected several projects and properties into Cheong Sun Development for listing.
Chiaphua, Cheong Sun Investments and Audio Supplies were all listed as contact addresses. (WKYP, 1971-11-9)
Cheong Sun Development: 1973-1981
Cheong Fat Building (WKYP, 1975-11-13)
In February 1973, Cheong Sun Development with paid up capital of HK$22.5 million went public on the Far East and Kam Ngan exchanges through the issuance of 7.5 million new shares at $1 apiece with Chekiang First Bank as underwriters. At the time of the IPO, the firm’s projects included the 16-story Hillview Court (昌林閣) at 30-32 Hillwood Road, the 12-story Cheong Hing Building (昌興大廈) at 26-30 Ha Heung Road in To Kwa Wan, the 22-story Cheong Wah Building (昌華大廈) at 289-301 Castle Peak Road in Tsuen Wan, with ground floor leased to Dairy Farmandthe 23-story Cheong Yuen Building (昌苑) at 2-8A Tsat Tsz Mui Road in North Point. (Cheong Sun Investments also developed Fairview Court (昌輝閣) at 5-13 Tsat Tsz Mui Road in 1974) The firm was also building 5 houses on a 20000 sq ft site on Bisney Road in Pokfulam. Aside from the abovementioned development projects, Cheong Sun was also building the 12-story Cheong Sun Building (昌生大廈) at 52-54 Wellington Street in Central with expected annual rental income of HK$2 million and developing a 18-story godown on a 17000 sq ft site on Texaco Road in Tsuen Wan near the Kwai Chung container terminals at the cost of HK$20 million with total storage space of 3 million sq ft.The projected net income at the time for fiscal year ending June 1973 was $3.4 million with projected next year net income of $4.6 million and PE multiple of 6.6 times and dividend yield of 8.5%. Aside from the trio, directors of the firm included Carrier and Frigidaire distributor Wilfred S.B. Wong (see the author’s book East and West for details about his life and his family) and Tsao Yao of Overseas Trust Bank who was a classmate of Liu and Kung at Tsinghua. (WKYP, 1973-1-28; KSEN, 1973-5-23, 1973-4-3)
During the economic slump in the mid-1970s, Cheong Sun’s profits went from $2.6 million in fiscal year 1973 to a loss of $80000 in fiscal year 1974 and loss of $103,000 in fiscal year 1975 despite the completion of two projects. In 1976, Cheong Sun’s profits rebounded to $2.4 million thanks to the sales of Cheong Kwei Building (昌桂樓) at 2-4 Kwai Heung Street in Sai Ying Pun and Hillview Courton Hillwood Road which brought in $15.7 million but profit margin were still thin thanks to high costs. At the time the Cheong Sun building in Central was 95% occupied and generating annual income of $950,000. (WKYP, 1977-8-18)
Cheong Sun’s ad for Cheong Wang Mansion and Cheong Wai Mansion in 1977 (WKYP, 1977-5-22
The next couple of years, Cheong Sun became more conservative and only engaged in a few projects at a time. In 1977, Cheong Sun developed Cheong Wang Mansion (昌宏大廈) at 539 Castle Peak Road and Cheong Wai Mansion (昌偉大廈) at 39A Kwong Fai Circuit in Kwai Chung. In 1978, Cheong Sun completed three projects, including a 14-story industrial building in Kwun Tong which it had a 25% stake in andCheong Hing Building at Ha Heung Road. (KSEN, 1979-4-4) In 1980, Cheong Sun developed the 24 story Cheong Wan Mansion (昌運大廈) at 55-59 Hill Road with 400 sq ft flats selling for $600/sq ft. (WKYP, 1980-5-20)
In September 1980, Inter-City Land Investment Co Ltd (聯城置業) which was a third controlled by Cheong Sun, began the development of the 22-story Sin Hua Bank Building (新華銀行大厦) at 5-11 Wyndham Street on the site of the former Victory House (built by Lun Sang & Co in the late 1940s, see article). The same month at a Lions Club talk, K.S. Cheng argued that the annual government supply of 35,000 units and private sector supply of 25000 units at the time were not sufficient to meet the at least 200,000 in population growth per year thanks to new immigrants from the mainland and births and urged the government to develop Lantau Island and relaxed the height limits for new developments. (WKYP, 1980-9-15)
Cheong Sun’s ad for Cheong Tai Commercial Building in 1980 (WKYP, 1980-9-20)
In June 1981, the trio reached a deal to sell 53% of Cheong Sun to Far East Consortium controlled by the family of fellow Shanghainese tycoon Deacon Chiu for $114 million or $6.50 per share (33 million total shares outstanding). At the time, Cheong Sun had assets estimated at HK$240 million or $8.60 per share. This included Cheong Sun Commercial Building, property in Lan Kwai Fong, three buildings on Catchick Street including Cheong Kat Mansion (昌吉大廈) at 100 Catchick Street, Cheong Hung Mansion (昌鴻大廈) at 2-14 Mei Fong Street in Kwai Chung and building on Ashley Road in Tsim Sha Tsui and development sites in Tsuen Wan, Wyndham Street, Caine Road, Queen’s Road West, Ap Lei Chau, Jordan Road, Fuk Wah Street, Yuk Sau Street plus $24 million worth of Letter B rights to New Territories land. The share price rallied to $7.10 in September as Carrian, Wardley and several Chinese companies were also interested in Cheong Sun. (KSEN, 1981-9-8)
Cheong Sun Development was renamed Far East Holdings (1982) Ltd after the acquisition was completed in 1982 and then again to ATV Holdings (亞洲電視集團) in 1987 when the Chiu family injected Asia Television into the firm. After the Chius sold ATV to Lim Por-yen and others in 1988, the listed shell changed its name to Far East Holdings International (changed to Far East Technology in 2000 but reverted to this name in 2007). In 2005, the original Cheong Sun Building on Wellington Street was redeveloped into the 26-story Sompteux Central.
After Cheong Sun Development
After the sale of Cheong Sun Development, Cheong Sun Investments under K.S. Cheng continued to develop properties in HK such as the residential building Cheong Ngar Court (昌雅閣) at 57 Caine Road in the Mid-Levels in 1982, the 22-story residential building Cheong King Court (昌景閣) at 26-38 High Street in Sai Ying Punin 1985, Fortune Plaza (昌運中心)at 4 On Chee Road in Tai Po in 1987 and the 20-story Cheong Sun Tower (昌生商業大廈) at 118 Wing Lok Street in Sheung Wan in 1991. Aside from Cheong Sun, the Chengs also owned Keader Properties (基達置業有限公司).
K.S. Cheng was a pallbearer for Kong Tak-yan (see article) at his funeral in 1988 and spent his later years in the US where he died in 1995. (WKYP, 1988-3-19) He married Jessie Yen-Tsing Yu Cheng (鄭傑西, 1926-2013) in Shanghai in 1948. A director (later chair) of thePublic Relations Association of HK (香港公共關係學會), Jessie spent two months in 1967 visiting the Americas visiting the World Expo in Montreal followed by attending the Public Relations conference in Rio de Janeiro in Brazil. (KSDN, 1967-9-20) In HK, she was also vice chairman of Po Leung Kuk and later moved to Hawaii where she promoted Chinese opera andestablished the K.S. Cheng Memorial Scholarship at the University of Hawaii at Manoa for undergrad and graduate students of Chinese descent after her husband’s death. Their daughter Claudine Cheng (鄭可欣) has practiced law in the US since 1986 and served as president of the Organization of Chinese Americans and on the board of many organizations and government commissions in California.
Left: K.S. Cheng (shoveling) at the groundbreaking ceremony for the Sin Hua Bank Building in 1980 with contractors Chan Kwok-wah and Chan Ching (WKYP 1980-9-12); Right: Jessie Cheng before boarding the Air Canada flight in 1967 (KSDN, 1967-9-20)
T.O. Liu was an astute investor whose advice was sought after by many and served as president of Tsinghua Alumni Association and Phi Lambda and District Governor of Lions Club in HK & Macau in 1966-67. His daughter Margaret Liu Wen-tsai (劉文采) married David Cheng, the son of Cheng Kok-man (程覺民） of Siberian Fur in Berkeley in 1963 (WKYP, 1963-6-15) and started her career in real estate after her divorce in the late 1970s. She helped a handful of Shanghainese tycoons from HK such as the Wu family of Wyler Textiles, her father’s partner K.L. Kung and friend John Tung and the Lee family of Chekiang First Bank purchased real estate in California and Texas. She married attorney Ted Collins in 1982 and has been involved in real estate investments and philanthropy in the Bay Area.
A devoted alumnus of Tsinghua, K.L. Kung donated US$600,000 in 2005 and HK$15 million in 2008 to the University in support of music education at his alma mater. His eldest son Tony took over the stereo business of Audio Supplies and added Conrad-Johnson, Passlab and Hansen Audio to the list of stereo equipment the firm represented. In 2017, the Kungs sold the hifi business to Ascent Luxury Co Ltd (升越公司) but Audio Supplies is an ongoing concern with Andrew Kung （龔國恩）as managing director.
Sources (other than those cited above):
This article was first posted on 4th June 2021.
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