iPhone screens made this hidden entrepreneur $7bn

Every time you’ve swiped the screen on a new iPhone or entered keystrokes on your Galaxy, you may have helped make Yeung Kin-man very rich.

Yeung is the founder and chief executive of Hong Kong-based Biel Crystal Manufactory, one of the biggest suppliers of cover glass to Apple and Samsung Electronics, the world’s two leading smartphone manufacturers. His control of the closely held business and ability to fend off competitors such as publicly traded Lens Technology, has given Yeung a net worth of $7.2 billion, according to the Bloomberg Billionaires Index.

“In the field of cover glass, Biel has always been the market leader,” said Terry Yu, a Shanghai-based analyst at IHS Technology. “Lens has been growing very quickly, but it’s still trailing behind Biel. In the short term, I can’t see any challengers to the two of them. 

Biel representatives didn’t respond to seven phone calls requesting an interview with Yeung. Press officials for Apple and Samsung declined to comment on their suppliers.

Protective Covers

Biel takes sheets of raw material supplied by glass manufacturers such as Corning– the world’s largest supplier of raw materials for smartphone glass according to Yu — and fashions them into protective covers. The business had $3.2 billion of revenue in 2013, Yeung said in a speech at the company’s 2014 Chinese New Year celebration. Sales increased the following year to about $4 billion, according to state-owned financial newspaper Securities Daily.

He owns Biel with Lam Wai Ying, according to corporate filings with the Hong Kong Companies Registry. The two are identified as husband and wife on a local government website for the Chinese city of Huizhou, where Biel has a factory. Yeung owns 51% of the business and Ying has 49%, according to the filings. The index credits the entire fortune to Yeung as Biel’s founder and chief executive officer, making him Hong Kong’s 10th-richest person.

Watches, Smartphones

Yeung entered the manufacturing business almost three decades ago supplying glass covers for watches. He began making smartphone cover glass after he noticed that the plastic screen on his mobile phone scratched easily, according to a report in Chutian Metropolis Daily earlier this year. That prompted him to recommend the use of glass to smartphone manufacturers, the newspaper said.

He started manufacturing the covers after receiving an order of 1 million screens for the Motorola Razr, according to the Hong Kong Economic Journal. He eventually produced 100 million units for the phone maker, the newspaper said. The company snagged Apple as a customer when the first-generation iPhone was released in 2007, according to the report.

Market Dominance

Operating out of factories in the southern Chinese cities of Shenzhen and Huizhou, Biel has become the biggest cover-glass maker in the industry, according to Claire Ohm, a spokeswoman at LG Display Co., a Seoul-based digital display product maker that’s also a customer. “A large portion of cover glass we use is largely supplied by this company,” she said.

Named after the Swiss city famous for its watchmaking, Biel is the world’s biggest maker of cover glass for phones made by Apple and Samsung, according to IHS analyst Yu, who estimates the company fills more than half of the cover glass orders from the two smartphone makers. Zhu Jixiang, a Shanghai-based analyst at Capital Securities, also cites Biel as the biggest and sees that market dominance as a barrier to entry for new entrants.

“It’s hard to see a third party rise to become a competitor,” Zhu said.

Biel is valued using 2014 revenue and the enterprise value-to-sales multiple for Lens. A liquidity discount of 30% is applied to account for the limited information about Biel’s financial results and the fact that only one peer company is used for comparison.

Competing Valuations

Way Kuo, president of the City University of Hong Kong, valued Biel at HK$110 billion ($14.2 billion) in a Sept. 23 South China Morning Post article about Yeung after the billionaire made a record $26 million donation to the school. Lens has a market capitalisation of $6.4 billion and is controlled by Zhou Qunfei, China’s richest woman, who has a net worth of $5.6 billion, according to the index

Peng Mengwu, Lens’s board secretary, said in an e-mail that it doesn’t consider Biel a competitor, adding that it serves “premium brand clients.”

Lens shares climbed 1.2% to 59.80 yuan at the close in Shenzhen.

To stay ahead, Yeung said in the Economic Journal interview that he’s always trying to innovate with new technology to make his glass covers fingerprint-proof and scratch-resistant. He was quoted in the Sept. 12 article that the company spends 5% of its total sales on research and development.

“We always try to create something new,” Yeung was quoted as saying. “For instance, fingerprints often get caught all over the touchscreen. That’s why we invented a technology that is fingerprint-proof. To enhance scratch resistance, we developed sapphire glass.”

With the increased order volume, Biel has expanded to more than 1.2 million square meters of production space at its China manufacturing facilities, and employs more than 100,000 workers, the newspaper said.

©2015 Bloomberg News


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