Chinese Estates Holdings has revealed a $2.26 billion loss on securities trading for the year to December following a series of adventurous market calls in the second half of the year. The provision - the biggest to date recorded by a listed company as a result of securities trading - came despite 80 per cent of its portfolio being invested in HSBC Holdings. The company - controlled by chairman Joseph Lau Luen-hung and his younger brother Thomas Lau Luen-hung, considered one of the SAR's most astute corporate raiders - has provided the latest glimpse into Hong Kong firms' proprietorial trading operations and the risks they entail. 'It's a big surprise,' DBS Securities property analyst Alice Hui Sze-mun said. 'I never expected they would make such a big loss and provision on securities.' Ms Hui said the amount lost showed the firm played the markets aggressively during the second half of the year. Chinese Estates financial controller Lam Kwong-wai yesterday did not disclose details of the stocks in its investment portfolio, but said it was valued at more than $5 billion compared with an estimated $1 billion in 1996. Last year, the company reported turnover from securities trading of $9.73 billion, up from $1.1 billion in 1996, again indicating its aggressive market activity. The surprise loss led Chinese Estates to post a well below expected $916.61 million net profit for the year to December, compared with $1.25 billion previously. Earnings per share were 47.4 cents, down from 68.3 cents. Directors announced a final dividend of 10 cents, bringing a 21-cent full year dividend, down from 47 cents. The result came as its mainland investment arm Evergo China Holdings posted an 11.7 per cent rise to $78.18 million, equivalent to earnings per share of 5.89 cents. No dividend was declared. Ms Hui said she had anticipated Chinese Estates would derive $3.4 billion net profit from the $3.64 billion sale of Entertainment Building to Hysan Development Co, which was completed in May last year. Mr Lam said he estimated that during the period the company reaped an exceptional gain of $3.26 billion from the Entertainment Building deal and sale of an office floor in Harcourt House, Wan Chai. He said Chinese Estates had reduced its securities portfolio up to 50 per cent after the market took a downturn. The company would continue to trim its portfolio to as little as between $300 million and $500 million, he said. Mr Lam said the company this year would focus on property development, including its huge redevelopment with Land Development Corp in Wan Chai. During the year, the company's gross rental income fell 12.9 per cent to $846.5 million.