The upswing in the real estate market could put paid to Chinese Estates Holdings' proposed privatisation of its property associate Kwong Sang Hong International, according to analysts. While the price offered by Chinese Estates - controlled by Joseph Lau Luen-hung - is close to Kwong Sang Hong's reported net asset value, minority shareholders may expect to see an increase in the company's worth due to the property rally. On Thursday, Power Jade, which owns 53.52 per cent of Kwong Sang Hong, proposed a privatisation of the company at $1.25 per share. Power Jade is jointly owned by Chinese Estates and a private investor, Anita Shum Yuk-ming. Ms Shum is the daughter-in-law of Cheng Yu-pui, a younger brother of New World Development chairman Cheng Yu-tung. Through another company, Good System, Chinese Estates owns a further 7.6 per cent of Kwong Sang Hong, making its total stake 34.36 per cent. The offer price represents a 6.72 per cent discount to the unaudited consolidated net asset value of Kwong Sang Hong shares of $1.34 on May 31. If the privatisation plan were to succeed at this rate, it would cost about $557.7 million. 'However, minority shareholders may expect to see a higher net asset value as the property market rebounds,' said Kenny Tang Sing-hing, a research manager at Tung Tai Securities. Mr Tang put the value of Kwong Sang Hong shares at $2 each, adding that the offer was just 5.04 per cent higher than Tuesday's closing price of $1.19. 'That makes it not very attractive,' he said. 'Chinese Estates will have to raise the offer price if it wants to get the nod from minority shareholders,' he said. However, Adrian Ngan, BNP Paribas Peregrine's head of regional property research, said the offer price of $1.35 was reasonable. He estimates Kwong Sang Hong's net asset value at $1.50 per share. Kwong Sang Hong owns the 960-unit Indi-Home serviced apartment development in Tsuen Wan, which is expected to be pre-sold shortly. It also has a 20 per cent stake in an urban renewal project in Tai Yuen Street, Wan Chai. The Tai Yuen Street project comprises four towers of about 900 flats. The first phase will be completed in the second half of next year.