Chinese gem retailer Zhou Zongwen became a billionaire when his Chow Tai Seng Jewellery company surged in value following its IPO.

Shares of the gold and jewellery seller rose 44 per cent, giving Zhou a net worth of at least US$1.3 billion, according to the Bloomberg Billionaires Index. Zhou, the company’s chairman, owns 65 per cent of the Shenzhen-based business along with his wife and son.

Zhou founded the company in 1999, growing the business through a franchise strategy. This enabled the company to grow its retail network to 2500 outlets across China, despite having direct control over just 12 per cent of those stores.

Chow Tai Seng’s net profit margin was 15 per cent last year, more than double that of its Hong Kong competitors Chow Sang Sang Holdings International and Chow Tai Fook Jewellry Group, which has franchised about one-third of its stores. Chow Sang Sang maintains direct control of its entire network.

Revenue for Chow Tai Seng last year reached 2.9 billion yuan (US$420.5 million) with a net profit of 426.7 million yuan.