Hong Kong’s Shen You Holdings to take considered approach to Australian venture
Strong group of racehorse owners behind new player keen to make their mark Down Under
The newest international player set to make a splash in the Australian racing and breeding scene, the Shen You Holdings group, has the backing of some of Hong Kong’s biggest and most prominent racehorse owners.
Shen You Holdings executive director Josiah Ma revealed yesterday that the Stock Exchange of Hong Kong-listed company’s recently launched equine venture plans to have as many 50 broodmares and interests in up to 15 commercial stallions, as well as operating a portfolio of colts.
The appointment of Shane McGrath, most recently Tony Fung Investments and Aquis Farm chief executive, as Shen You’s executive director to oversee the equine investment fund was announced this week in order to take the equine fund to its next stage after establishing a foundation earlier this year.
Already, Shen You has interests in stallions Farnan (Not A Single Doubt), Extreme Choice (Not A Single Doubt), Sooboog (Snitzel) and Grunt (O’Reilly), while Members Joy (Hussonet), the dam of dual Group 2 winner Pure Elation (I Am Invincible), is the standout of its 15-strong broodmare band.
At least 30 prominent Hong Kong owners, who have upwards of 100 horses in training at Sha Tin, are backing the predominantly Australia-focused equine venture which could spend more than $10 million in 2022 on bloodstock as part of its aggressive entry into the industry.
“Most of the horses in Hong Kong come from Australia, so we have a big, big group of owners which are very interested in the Australian program,” Ma told ANZ Bloodstock News.
“Many of the shareholders in our company are prominent owners in Hong Kong, so apart from just racing in Hong Kong, we think it is a good idea to start an equine fund to invest in the Australian industry.”
Ma, who has an association with Tony Fung and has watched from afar the Aquis Farm investment, said the structure of the fund will not only be targeted towards income-generating stallions and broodmares, it will also have a higher-risk component whereby they will invest in yearling colts to race in the hope they can perform well enough on the racecourse to warrant a home at stud.
“Of course, we don’t have the financial capacity of Mr Fung. What we will be doing will be different to Mr Fung. He’s spent a lot of money, but what our investment will be is to (buy into) established stallions or up-and-coming stallions … rather than investing in potential stallions.
“Mr Fung’s approach is higher risk, higher reward, but we are a listed company that will be looking for low-risk but (ensuring) a constant return.
“We are trying to build a nice portfolio that can generate positive cash flow every year, so hopefully we can provide dividends to the shareholders.”
Ma, 42, is mindful it will take time to start paying out dividends to shareholders but the business has already set out a tentative timeline.
“Our first milestone will be three years, so around 2023 or 2024, depending on the program (and success),” he said.
While McGrath, who selected Golden Slipper winner Farnan and fellow Group-winning colts Prague (Redoute’s Choice) and Anders (Not A Single Doubt), will be relied upon heavily to determine how the venture is structured, it is expected Shen You Holdings will try to partner with other like-minded investors to enable its foray into the yearling colts segment of the market.
“Shane is talking to a lot of people in Australia about the possibility of working together,” Ma said.
“We will try to buy some yearling colts ourselves, but maybe do it in partnership with others. We may even partner with Tony Fung if he is willing to let us (join in).”
Shen You Holdings, which is primarily involved in the manufacture and distribution of sewing threads, has a market capitalisation of HK$202.35 million (approx. AU$36,266,748).
“We are looking forward to working with Australian studs and exploring the opportunities that come up, but we are not planning to run our own farm at all,” Ma said.
“We are based in Hong Kong and it is not economical for us to run our own farm.”
Ma, who studied at university in Sydney in his early 20s and owned his first racehorse aged 21, intends to come to Australia before the Inglis Australian Easter Yearling Sale in April, while fellow Shen You executive director Alex Leung could be in Australia next month, although after the Magic Millions Gold Coast Yearling Sale has been held.
“Alex will be flying over around the end of January and he will spend maybe two months in Australia to work with Shane and afterwards I will come over prior to the Easter sale,” he said.
“We have to plan our trip carefully as we are required to undertake three weeks of quarantine on our return to Hong Kong.”
Ma has acquired shares in broodmares in Australia in recent years in his own right and it was his involvement in some Aquis Farm breeding stock which led to him forming a close working relationship with McGrath.