Chinese Estates Holdings is poised to privatise its property unit Kwong Sang Hong International in the latest restructuring of the group. The property investor, controlled by Joseph Lau Luen-hung, acquired a controlling 34.36 per cent stake in Kwong Sang Hong from Peregrine Investments when it was liquidated in 1998. Shares of Kwong Sang Hong, which is involved in property development and the manufacture of cosmetic products, were suspended from trading yesterday. The company said it was awaiting a privatisation proposal but did not elaborate. Analysts said Chinese Estates was being lured by the property assets of Kwong Sang Hong following the rebound in the sector. Home prices have increased by about 50 per cent from last year's low. Dao Heng Securities analyst Eric Yuen said Chinese Estates thought the value of the assets owned by Kwong Sang Hong was not fully reflected in the price of the company's stock. Shares of Kwong Sang Hong closed at $1.91 before suspension. The company owns the 960 unit Indi-Home serviced apartment development in Tsuen Wan, expected to be pre-sold shortly. It also has a stake in an urban renewal project in Tai Yuen Street, Wan Chai. The Tai Yuen Street project comprises four residential towers of about 900 flats. The first phase will be completed in the second half of next year. Analysts said the move once again reflected Mr Lau's confidence in the residential market. Last month, he bought four houses at 31 Baker Road for $382.79 million from Chinese Estates as part of a series of asset purchases amounting to $642 million. The deal raised some eyebrows at the time as a month earlier, property agents had said the four Baker Road houses were originally priced at $500 million.