22 February 2019
CEFC China Energy founder Ye Jianming is close to Middle East leaders and top European politicians. Photo:
CEFC China Energy founder Ye Jianming is close to Middle East leaders and top European politicians. Photo:

China’s oil baron invests in Evergrande

In an eye-catching deal, China Evergrande Group (03333.HK) introduced eight strategic investors who will contribute 30 billion yuan for a combined 13.16 percent of the enlarged equity interest in the firm’s property unit Hengda Real Estate.

The transaction values Hengda at 228 billion yuan (US$33.3 billion), surpassing top developer China Vanke’s (02202.HK) 224 billion yuan market capitalization.

Among the eight strategic investors are some big players, including state-owned Shandong Highway Group and CITIC Junhe Investment.

Some of them are rarely heard of, such as Ruican Investment, a unit affiliated with CEFC China Energy.

CEFC is no small fry.

The privately owned oil trading company is owned by 39-year-old founder Ye Jianming, a low-profile billionaire who earned his first pot of gold from property speculation.

In fact, CEFC ranks 229 on the Global Fortune 500 list, with US$42 billion in revenue in 2015. That puts the private company ahead of other household names such as China National Chemical Corp., Vanke, Wanda, AIA, or Evergrande.

Oil and gas, industrial processing and finance accounted for 60 percent, 15 percent and 25 percent, respectively, of CEFC’s turnover last year.

The company’s core business is crude oil trading. It buys crude oil from small and mid-sized producers and resell them to other companies or nations.

This segment has been largely ignored by global oil giants like Shell and Exxon Mobil for some reason. And it’s said CEFC has already become a top player in this market segment.

Ye has been very close to Middle East leaders and top European politicians. He is the only foreign economic consultant to the Czech president.

Also, CEFC has acquired 51 percent of Kazakstan’s oil company KMG and become its major distributor for oil exports.

Ye rarely makes public appearances. Interestingly, he has been fairly active in the business and political circles in Hong Kong in recent years.

He has set up the China Energy Fund Committee and is the chairman. The committee is engaged in energy strategy research, developing energy and public foreign relations and top-tier think tank.

It’s reported that the committee spent nearly HK$1.4 billion in September last year to expand its headquarters in the Hong Kong Convention and Exhibition Center in Wan Chai.

Also, Ye has become the only political consultant to the New People’s Party since 2015. Regina Ip, the party’s co-founder and chairwoman, reportedly paid a visit to CEFC’s Shanghai headquarters in 2015 and met with Ye.

This article appeared in the Hong Kong Economic Journal on Jan. 5

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist

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