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Let’s get fiscal

March 2018


Complicated companies

Nury Vittachi

Hong Kong’s humorist on why analysts have to watch the numbers and wear blinkers



Shopkeeper: “Will you be paying by Octopus, credit card, EPS, Apple Pay, debit card, Google Pay or sacrifice of your first born?”

Me: “Uh, do you take cash? No? Okay, I guess it’s one of the kids, then.”

Life is so complicated these days. Not only has money disappeared, but a financial analyst friend was complaining that none of the business categories make sense any more. “None of the shows I watch these days are made by moviemakers. They’re all made by delivery companies,” he said. He was referring to the fact that Netflix is technically a DVD rental delivery company and Amazon’s core business is, or was, book delivery.

It is weird, you have to admit. The world’s biggest shopkeeper, Alibaba, doesn’t actually have any shops, and the world’s biggest taxi company, Uber, doesn’t own a single taxi. Then of course there’s Airbnb, which is now one of the world’s largest hotel company, despite not owning a single hotel.

Once you start looking you see similar examples everywhere. I was thinking about this on a train – and of course, Hong Kong’s MTR Corporation is a train operator that makes its money in property development.

“These days you have to wear blinkers so you only see a company in terms of its numbers,” said the analyst, who did not want to give his name. “If you dig deeper and try to work out why a baby-food company has a sideline making attack helicopters, you get stuck. It shouldn’t work. But it does.”

I feel his pain. But the trouble is, if you just look at the numbers and hide your eyes from what companies are actually doing, you get into trouble. A couple of years ago, HSBC was scolded by watchdogs for failing to notice that it was handling money for an obviously fake company – a company with paperwork that said its business was export of mini-skirts to Iran. That’s as ridiculous as exporting air-conditioners to the North Pole or running saunas in Thailand. Wait. Thailand’s full of saunas. Never mind.

Two days later, my analyst friend reported that after our conversation, he had been inspired to research the history of companies that dramatically changed their core businesses: “Most young people today probably have no idea that Shell, the multinational oil company, is called that because it started as a shop selling seashells. Sharp, the Japanese electronics company, made pencils. Nintendo, the king of video games, made playing cards.” (I should point out that this gentleman is not young, and can probably remember when stone was the big thing and folk trying to usher in the bronze age were seen as upstarts.)

I asked which company had made the biggest departure from its original core business. He said Nokia was set up to make rubber boots but accidentally became the global king of mobile phones.

The discussion reminded me that I used to live near a small shop on Caine Road which sold earrings and apartments. This curious mix actually worked very well. The cheap costume jewellery would relax people into spending mode – and then they’d notice the apartments for sale. The result would be difficult to explain to their spouses.

Wife: “I got two pairs of earrings for HK$39.90! Oh, and a small flat in Yuen Long for HK$10 million.” Me: “Cool earrings!”

The analyst told me to look for clues to a company’s original purpose in its name. American Express, for example, was a delivery service too. A staff member would collect stock certificates or currency from a bank and then hurry off to deliver it by horse or train at “express” speed across the United States.

This led me to wonder if he had the answer to one of Hong Kong’s great mysteries. How come nearly all the branches of PARKnSHOP have nowhere to park?


“If PARKnSHOPs were places where you could park and shop, that would make sense,” he said. “And that’s too much to ask for.”


Nury Vittachi is a bestselling author, columnist, lecturer and TV host. He wrote three story- books for the Institute, May Moon and the Secrets of the CPAs, May Moon Rescues the World Economy and May Moon’s Book of Choices