Duan Yongping: China’s great quiet achiever
Although not widely known in the west, Duan Yongping is a major figure in China’s smartphone and technology markets.
Who is he, though, and why are the actions of this billionaire shaping the world?
Duan Yongping’s early years
Duan Yongping was born in 1961 in Nanchang, the capital of the southeastern Jiangxi province of mainland China.
China instated a college entrance examination system in 1977, one year before Duan Yongping applied.
At the time, about ten million people applied, and 5.7 million of those actually passed. Due to limited space, however, only 272,900 students could actually attend classes, and Duan Yongping was one of those capable enough to get through.
After studying radio engineering, Duan Yongping briefly worked at a state-owned company but returned to college to study economics.
The company in question, Beijing Electron Tube Factory, would eventually become display manufacturer BOE.
At the time Yongping left, electronic tubes were falling rapidly out of favor. They were being replaced by semiconductors with integrated circuits, which are still used today in many electronic devices.
Although an engineer by training, the changes in the industry drove Yongping to learn more about economics and the business aspect of things.
What is Duan Yongping’s Subor Study Machine?
Duan Yongping’s first major achievement came in 1988 when he joined the company Subor.
At the time, he noticed that Nintendo’s Famicom entertainment system was explosively popular in both Japan and the United States, but hadn’t quite reached the Chinese market yet.
To take advantage of this, he pushed for the creation of the Subor Study Machine.
This machine was ostensibly a hybrid PC/console and sold as a learning machine, but was functionally a Famicom clone capable of playing Nintendo games.
The Subor Study Machine was enormously popular at the time and made Duan Yongping a tidy profit, but the company pushed back against his other requests and ideas.
Recognizing that he couldn’t go further at that company, Duan Yongping left Subor to found BBK.
Subor itself has struggled in recent years, beset by a 15-year ban on game consoles within China.
The Beginning of BBK
The company called BBK started in 1995 with Duan Yongping as one of its primary founding members. BBK is a complex company with several major components to it.
What sets this company apart is Duan Yongping’s partial ownership of each section and willingness to have one segment help the others if needed.
Unusually for a technology company, several of its aspects directly compete with one another. A few years after inception, the company split into Audiovisual, Communication, and Education electronics segments.
While the audiovisual segment struggled in 2003, it was largely reborn as the company OPPO.
OPPO has since launched new subsidiaries and brands, including OnePlus and realme.
The communications segment also eventually rebranded, producing the VIVO and IQOO brands.
Today, BBK is one of the largest smartphone companies in the world, surpassing both Huawei and Apple in total units shipped.
What are Duan Yongping’s business interests?
Although Duan Yongping was instrumental in BBK’s early growth, he didn’t remain at the forefront of the company for long.
BBK was already a jointly-owned business, which was rare for Chinese companies at the time, so handing it over to others was relatively simple.
After traveling to the United States, he eventually came across a book by Warren Buffet about the ideals of value investing.
Unlike Buffet, Duan Yongping began focusing most of his attention on technology and internet companies, which he was in a good position to evaluate thanks to his previous professional experience.
He invested a large amount in NetEase in 2001, when a stock bubble burst in the United States had dropped its shares down.
NetEase was huge in China at the time, though, and it was still growing strong.
The stock rebounded within two years, giving Yongping a return of several dozen times his initial investment.
With this new wealth on hand, Duan Yongping ultimately invested in UHAL (Amerco), a trucking rental company that owns the U-HAUL brand.
The company was going into bankruptcy protection around 2003 after a failed expansion bid, but Duan noticed that the company’s assets drastically exceeded its share value.
By 2006, the company’s value had gone from $3.50 a share to over $100.
This rise wasn’t as large as NetEase saw, but with a million shares owned, Duan Yongping was a major beneficiary of UHAL’s internal improvements.
Today, Asia Markets estimates Duan Yongping’s net worth is around $2 billion dollars.
Duan Yonping’s management style
Duan Yongping has a largely hands-off role in companies he owns major stakes in.
However, he has a long history of using company incentives to help encourage and motivate employees to perform, and this has generally worked out for him.
Notably, he discouraged using options for unlisted companies, citing them as having little practical significance.
Instead, Yongping often suggests helping employees get equity in the company through stock ownership.
At times, he has even used interest-free loans, to be repaid through dividends of stock ownership, to help employees buy stock in their companies.
Who is Duan Yongping’s wife?
Duan Yongping met his eventual wife Liu Xin in 1998. While the details of the courtship are unknown, they got married in about two months.
At the time, Liu Xin was working for the Palm Beach Post, a daily newspaper covering things in southern Florida.
Duan Yongping soon moved to the United States, stepping away from BBK to fulfill a promise with his wife.
What Does Duan Yongping Do Now?
Despite staying out of the public eye for most of his life, Duan Yongping remains a source of advice and inspiration for some Chinese investors.
He’s particularly known for his relationship with Huang Zheng, another Chinese entrepreneur.
Huang Zheng helped NetEase solve a technical problem around the time of the stock burst, which was a factor in their ultimate recovery.
Later, Huang Zheng got suggestions and guidance from Duan Yongping and set up Pinduoduo, which has become one of China’s largest shopping sites and got early investment from Yongping.
Like many billionaires, Duan Yongping contributes to some charitable activities. He and his wife run the Enlight Foundation, a US-based nonprofit that mainly supports educational groups.