Hong Kong developer Chinese Estates morphs into investing firm, swings to profit in first half

Property company controlled by family of Hong Kong tycoon Joseph Lau Luen-hung reports a first half profit of HK$845 million (US$108 million), reversing from a HK$363.5 million loss in the same period last year

Result was boosted by gains from investments

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Chinese Estates, developer of No. 55 Conduit Road, has transitioned from a property group into an investment holding company, as indicated by its results announcement for the first half of 2019. The last property sold by the company was at the Conduit Road development in January 2018. Photo: Sam Tsang

Published: 5:30pm, 2 Aug 2019Updated: 11:13pm, 2 Aug 2019

Chinese Estates Holdings, the developer controlled by the family of Hong Kong tycoon Joseph Lau Luen-hung, reversed its interim result in the first six months of 2019, after making gains from listed market investments. The real estate company had not sold a single property in 20 months.

The company posted an interim profit of HK$845 million (US$108 million) for the six months ended in June, reversing the HK$363.5 million loss from the same period last year, after an investment gain of HK$1.25 billion, including changes in fair value on bond holdings. Sales fell by nearly 52 per cent to HK$269.8 million.

Chinese Estates, chaired by Lau Ming-wai, 38, earned 97 per cent of its total revenue from rental income across residential property, offices in mainland China and shopping centres that it owns and manages. The last time the developer had sold a property was in January 2018, when it disposed of a 4,170-square foot (387 square metre) luxury apartment at its 55 Conduit Road project at the Mid-Levels for HK$286.2 million.

But the company made up for its dearth of property sales with investments, which underscores its transformation from a developer into an investment holding company.

“The turning from loss to profit for the period was mainly due to listed investments and treasury products,” the company said in its half year results announcement.