Chinese Estates proposes spin-off

PUBLISHED : Thursday, 18 July, 1996, 12:00am
UPDATED : Thursday, 18 July, 1996, 12:00am
 

Chinese Estates Holdings, the property developer controlled by Joseph Lau Luen-hung and brother Thomas, has confirmed it has made an application to the Stock Exchange of Hong Kong for a spin-off of its mainland property projects.


Company secretary Lam Kwong-wai said directors of the company would like to stress the proposed flotation was 'still at an early stage and the proposed listing may or may not proceed'.


The company is among a number of property firms which have revealed plans to spin off their mainland property projects.


Other property firms which have indicated such intentions over the past month are Cheung Kong (Holdings) and Lai Sun Development.


Chinese Estates' executive director Thomas Lau Luen-hung said recently the size of the company's China business was big enough for a spin-off and a separate listing could help streamline its property investments in Hong Kong and the mainland.


The company's annual report stated its China investments as at December last year amounted to $1 billion, representing about 5.3 per cent of the group's net asset value.


Its total capital commitment in China reached $62.9 million by the end of last year.


The portfolios include commercial, residential and hotel projects in major cities, including Beijing, Shanghai, Guangzhou and Shenzhen.


Earnings contributions from mainland operations have been rising over the past few years and profits contributed by the division would continue to increase.


Profit contribution in mainland China last year reached $29 million, or 5.7 per cent of the company's net profits.


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