Chinese conglomerate HNA Group has been getting a lot of media attention recently.
After spending HK$27.2 billion to acquire four land plots in Kowloon, the group is said to be in talks to acquire stake in local fund house Value Partners Group.
Despite its high-profile deals, not much is known about the mainland business group, which had been rather secretive about its background and business growth.
But now we have a chance to learn more.
In a six-volume book “Secret Code of HNA”, published in association with Hong Kong’s Chung Hwa Book Co., the company has offered more information about its background and management philosophy.
The book series was penned by an author under the pseudonym “Tiandao”, with HNA’s founder, Chen Feng, writing the preface.
“The series of books have shed light upon the secrets of HNA’s success from internal and external perspectives, covering strategic transformation, business concept, philosophy, management style, employees and case studies,” Chen said.
Also, HNA provided substantial internal confidential information to the author.
The book has revealed the scale of assets held by the conglomerate for the first time. Founded in 1983, HNA reported revenue of over 600 billion yuan last year, with total assets of over 1 trillion yuan. Its debt ratio has dropped to 59 percent last year from 80 percent in 2010.
The empire has four main units, namely logistics, travel, finance and industrial, which represent 60.4 percent, 21.4 percent, 10.2 percent and 8 percent of its revenue respectively.
The conglomerate started out as a small local airline. It now owns more than 10 airlines including Hainan Airlines, Tianjin Airlines, West Airlines, and Beijing Capital Airlines. The unit generated total revenue of more than 130 billion yuan last year, up 230 percent from that in 2010.
Also, HNA Group has shown great appetite for assets in Hong Kong. It viewed the former British colony as the gateway to global markets, and has set up a global headquarters in the city to boost its competitiveness, according to the book. The move is aimed at paving the way for tapping into other Asian markets as well as the West.
“Hong Kong and mainland have strong cultural and ethnical bonds, which make the city unique. Also, Hong Kong is the transport and financial hub in Asia, which makes it the best place to interact with western civilizations,” HNA chairman Wang Jian said.
The book notes that founder Chen has been studying Buddhism and “the spirit of HNA has been heavily influenced by that.”
It also mentions a story about how the management saw the coming of a financial storm before the 2007 economic crisis. The foresight helped HNA weather the serious global downturn and even use the opportunity to expand.
HNA Group’s success, as a matter of fact, has also drawn the interest of Western scholars. Harvard Business School has used the company as a case study three times.
Harvard Business Review published three articles on the Chinese conglomerate: “A Miracle in Civil Aviation” in 2005, “HNA Group: Moving China’s Air Transport Industry in a New Direction” in 2008, and “HNA Group: Global Excellence with Chinese Characteristics” in 2016.
This article appeared in the Hong Kong Economic Journal on May 23
Translation by Julie Zhu
– Contact us at [email protected]