CHI Cheung Investment's heavy exposure to property trading may make it seem a somewhat speculative stock, but its well-timed purchases and sales have brought more rapid growth. Group chairman and chief executive Paul Ng Kwok-cheung is adamant that property trading is crucial to increase turnover and strengthen recurrent income. ''We cannot allow Chi Cheung not to trade properties, which is a way to make the company big,'' he said. ''Property trading is a tough business, but can prove the most profitable if you get it right.'' Many of Hong Kong's biggest property companies built themselves through trading. Chi Cheung, a young company, stresses the need to be sufficiently flexible to respond instantly to opportunities - whether to buy or to sell - thrown up by the market. Since Mr Ng, a veteran of the property market, took the helm of Chi Cheung in March 1992, the group has generated handsome profits from a number of deals. It has bought interests in a redevelopment project in Mongkok, the Hankow Centre in Tsim Sha Tsui and the Golden Hill Commercial Building. Chi Cheung also has a 10 per cent interest in a Lai Sun Development-led consortium that bought the Ritz-Carlton Hotel in Central for $1.03 billion. That is an investment the company intends to hold for the long term. The group also holds interests in Baguio Terrace, Ann Gardens, the World Trade Plaza and a property at 15 Tin Wan Street. New Mandarin Plaza Tower A, in which Chi Cheung has a 21.4 per cent stake, is being offered for public sale on a strata-title basis. The group also owns 20 per cent of a commercial development at 289-295 Hennessy Road. ''Timing is a very important factor. You've got to buy at a good time and sell at a good time as well,'' Mr Ng said. ''To do so takes experience and foresight.'' Chi Cheung's trading strategy paid off in the form of a property sales-fuelled profit of $162.58 million for the 11 months to December 31, 1992. Profit for the six months to June 30 last year was $49.9 million. Chi Cheung has been bolstered by Mr Ng's experience and connections. He has been involved in the local property sector since 1970. He was with Li Ka-shing's Cheung Kong (Holdings) for 15 years, and joined Allied Properties in 1985. He was also the man who lined up several listed companies, including Sun Hung Kai Properties, Lippo, Allied and Sino Land, for a joint takeover of Chi Cheung in 1992. Mr Ng now owns about 35 per cent of the company, Sun Hung Kai 16 per cent, and Goodwill BVI, a holding company owned by 14 individuals and listed companies, under 10 per cent. Mr Ng said the link with so many big companies would help Chi Cheung take part in some of their projects. ''Property companies are so financially rich, and very often they do not need to get a partner to join their projects,'' he said. ''Under such circumstances, good connections and relations with them will play a crucial role in fostering co-operation.'' Chi Cheung does not restrict its interests to Hong Kong. It has also joined the local companies breaking into China's property market. The group owns 21 per cent of a Huiyang golf club, 30 per cent of the Wuhan's Golden World Centre and Wuhan Xiu Hua Hotel, 20 per cent of a Foshan commercial-residential complex, and the Rose Garden Villas development in Beijing. Its latest mainland acquisition is an 18-storey hotel and office building in Hainan province, bought for $91.3 million from a subsidiary of the People's Construction Bank of China (PCBC). The deal also made Chi Cheung something of a China play, as it paid for the deal by issuing new shares to Intime Holdings, which is controlled by a subsidiary of the PCBC's Shenzhen branch. Intime now has a 13 per cent interest in Chi Cheung. Mr Ng said the deal had paved the way for co-operation with Intime in property or other ventures in China. ''If there are viable and profitable projects, not necessarily property projects, our group will go for it,'' he said. ''Chi Cheung, although a property company, will not confine itself to the property industry.'' He revealed that Chi Cheung was currently negotiating with Intime over several joint-venture investment projects in China. But he would not give details before they were finalised. Mr Ng said China's proposed property gains tax, if it went ahead, would hit the sector hard. ''Hong Kong investors would become very cautious about their future investments in China,'' he said. ''Chi Cheung will observe the situation with the tax reforms carefully before pushing ahead with its investments there.'' While uncertainty clouds China's property sector, Mr Ng expresses confidence in the Hong Kong property market. He believes low interest rates, the China factor and that fact that demand is outstripping supply will continue to push property prices up. ''In view of the slow economic growth worldwide, Hong Kong's accumulated wealth will not flow out of the territory,'' he said. While land and property prices are high, Mr Ng believes that, with people getting richer, property companies not over-geared and banks sound, there is no danger of the market crashing. In Hong Kong, big developers dominate the market, but there is still room for smaller ones in the less-ambitious projects or in property trading. Chi Cheung is among the smaller companies competing for a lucrative slice of the market. While many investors look to the giants of the sector, Mr Ng believes that second-and third-liners such as Chi Cheung have their points. ''Property blue chips have their attractions. But smaller property counters have their own beauty too.''