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Me&MyMoney

Young go-getter truly an Alpha male

Just 28, Cheong Jin Hao started learning the ropes of doing business when he was a teen

Instead of planning for a graduation trip across Europe in his final year of university, entrepreneur Cheong Jin Hao had bigger fish to fry - such as devising strategies to enter emerging markets such as Myanmar.

Mr Cheong, now 28, already had a solid grounding in the business world, having grown up helping out in his family business Raduga, which distributes mobile phones and telecommunications equipment and also provides solutions to retailers, among other things.

He was looking to set up his own firm, and a multinational corporation gave him a chance to distribute its mobile products.

Mr Cheong set up Alpha Technology & Communication with US$10,000 (S$14,200) at the same time when he was finishing up his studies at Nanyang Business School.

Recalling Alpha's early days, he says: "It started with four people and we went to Myanmar, staying in places where there were rats in the ceilings, and we constantly had food poisoning. The weather reached over 40 deg C and frequent blackouts became normal.

"We had to go to Yangon and other provinces, putting up banners and standees in front of retail shops to raise awareness, and sold products through our partners."

  • Worst and best bets

  • Q What has been your biggest investing mistake?

    A To go all out into buying shares back then. I started investing more than $100,000, which was almost all my savings or funds at 21, and the value of that has probably dwindled to about half. Everyone was talking about buying shares and that when you do that you are truly investing, and I followed because of the herd mentality.

    I did only basic research and bought names everyone knows. I've held on to my stocks as a reminder that I need to invest in things that I can contribute to and effect changes in.

    Q And what has been your best investment move?

    A The best move was starting out early in the business, helping my parents. It started out as them just needing an extra pair of hands.

    As a child, who would want to be working every day during your school holidays? I'd work seven days a week and start work as early as 10am, until midnight. Over the years, I felt that I might as well learn something from the experience. It became the best investment move as I was investing in myself to learn about the business, which opened doors of opportunity.

    I'm young and I can take hardship. I didn't worry and wasn't afraid to do things such as going into Myanmar to do business. I've always been very focused. I just want to be successful, and when you identify your goal, you go ahead.

    To be able to invest the way I do at this age, I guess I'm ahead of my time in a way. I put in extra effort when others were still studying and I had to give up a lot of my personal time to juggle business and school work.

    Rachael Boon

He became Raduga's general manager last year, but only after officially joining the firm at 19 and several years of learning the ropes.

He now divides his time between Raduga, Alpha and other business investments.

Mr Cheong oversaw Raduga's move into a new $30 million seven-storey building in Lavender Street in October, from a four-storey shophouse in Hong Kong Street.

The only one of three children to be interested in the family business, he never turns away from grunt work and enjoys setting up businesses independent of Raduga.

Q Money-wise, what were your growing-up years like?

A My parents started Raduga in 1992 from scratch. When I was growing up, they taught me to be thrifty, and the make-or-break attitude.

I didn't get to see my parents often when I was young; weekends were spent helping out with manual tasks at the shop in High Street Centre. I knew it wasn't easy to make money. I'd be removing phones from boxes, separating the content, and would go home with bleeding fingers.

Things started changing from 2004. The business started doing well, and in secondary school and junior college, I started observing how sales were done .

Q How did you get interested in investing?

A I wanted to create more value in myself, instead of just doing what others did with the usual path of going to school, getting a stable job and so on. I wanted a challenge.

In the last year of national service when I was 21, I wanted to try investing in stocks. At that time, people would talk about making a lot of money if you bought a stock on its initial public offering (IPO).

The prospect of making money on the first day of trading of a newly listed firm is tempting. If everyone goes into an IPO for easy money, they would make a lot, but life is just not so simple. I made losses and one reason was that I didn't have time to focus on trading.

The difference between investing in the private and public markets is that in the latter, I can't use my business experience to help change things around.

I learnt a good lesson - that I should spend more of my time in the private market where I've more control. That's why I set up Alpha. In less than five years, it has an annual revenue of almost US$30 million.

NO EASY MONEY

The prospect of making money on the first day of trading of a newly listed firm is tempting. If everyone goes into an IPO for easy money, they would make a lot, but life is just not so simple.

'' MR CHEONG JIN HAO, on why he prefers to spend more time on his businesses.

Q Describe your investing strategy.

A I look for return on investments but that doesn't just mean how much I can earn from how much money I've put in.

It's also about the time and effort invested in the business, like studying how complicated the business is and the risk factors.

For instance, even though there was a major risk going into a country I knew so little about, I saw an opportunity in 2012 when Myanmar was slowly opening up.

I wanted to be a front runner in the market and from my experience setting up Alpha, I learnt I should always try to move ahead of the market, and not do what's tried and tested. I also learn from other businesses, to apply it back to my industry.

When investing in other markets, I do seek local partners as the way things work is very different.

Q What's in your portfolio?

A With friends like Fundnel's Benjamin Twoon, we set up a company in 2014 that looks into the food and beverage industry. It has also made some private investments in Indonesia, like lifestyle venue Flowhouse in Bali.

Such investments allow me to use my business acumen to help out, change things and also learn from others in other industries. For instance, my strength is in operations and Ben's in the financial markets.

We each invested $25,000 in the firm. I've at least three firms in my portfolio, where my investment in companies makes up about 60 per cent.

Another is Apex Distribution, which I set up to distribute another MNC's products in Myanmar in 2013. I started it with US$10,000.

Besides my capital for Alpha and Apex, I also had the support of my parents in terms of credit facilities.

My stock portfolio is worth about $100,000, which includes blue chips and some oil and gas stocks.

I bought a freehold landed property, more than 5,500 sq ft, in the central region almost three years ago. With my savings and bank loan, I paid 30 to 40 per cent of the price and it makes up a big chunk of my investments. It has a rental yield of 3 to 4 per cent.

Q What are your immediate investment plans?

A I'm looking at the possibility of car leasing. A friend shared the idea with me. You limit the downside because the cars are assets.

For Raduga, we've big plans to firm up ourselves as the premier mobility distributor, to solidify our presence in all countries in South-east Asia and most of emerging Asia. We want to be the go-to channel for the brands that want immediate access to the markets we serve, to replicate the success our business model has had.

The immediate markets we'll look at include Cambodia, Thailand and Indonesia. I will be spearheading this move, evaluating the available opportunities in these places. We'd be investing an estimated US$30 million for the next two years.

Alpha used to only distribute the multinational's mobile products in places like Mongolia, Maldives and the Pacific Islands. Now it distributes a full range in Maldives with a strong partner, and I want to increase this business to territories in emerging Asia. The investment would be US$3 million for two years.

Q How are you planning for retirement?

A When I was younger, I kept saying I wanted to work hard to retire young. As time passes, it feels like a constant pursuit of success and that I'm now on an expressway - I want to keep going with my foot on an accelerator.

I'm in the best years of my life to grow the business and maximise my investments right now so I can't see an end.

Q Home is now...

A A landed property in the central region with my parents, elder brother, his wife and my nephew.

Q I drive...

A A four-year-old Toyota Corolla Altis.

A version of this article appeared in the print edition of The Sunday Times on December 04, 2016, with the headline 'Young go-getter truly an Alpha male'. Print Edition | Subscribe