A 9,800% stock increase exposes Hong Kong's billionaires on paper

HONG KONG (April 18): They are classic Hong Kong stories: people who, in a blink, became stock-market billionaires. But exactly what’s behind much of this wealth is something of a mystery.

Take Wong Wing-wah, who used to be a fishmonger before starting a civil engineering firm. He took his company public last year -- and its stock then soared 9,800%. Wong and a partner, who together own nearly all of the stock, are each now worth roughly US$1 billion ($1.4 billion).

Their company, Luen Wong Group Holdings Ltd., reported just US$1 million in profit last year. What’s going on? The answer lies in one of the murkiest corners of Hong Kong finance: small-cap stocks.

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