Chinese Estates to post US$190 million loss as disposal of China Evergrande shares weighs heavily on bottom line
- It is Chinese Estates’ biggest loss since 2010 when it lost HK$8.85 billion (US$1.1 billion)
- Company says loss of about HK$7.87 billion from the disposal of shares in China Evergrande would be recorded as ‘other comprehensive expense’ for the year
The company, which is 79 per cent owned by the family of Hong Kong tycoon Joseph Lau Luen-hung, said it will post an annual loss of HK$1.5 billion (US$192 million) for 2021, its biggest since it lost HK$8.85 billion in 2010.
Last year, the company sold certain securities investments and treasury products which mainly comprised equity securities, bonds and structured products. “As a result of the disposal, it is estimated that a net realised loss of approximately HK$1.50 billion would be recognised” for 2021, it said in a statement to the Hong Kong stock exchange on Friday.
Chinese Estates said that it had sold shares of Evergrande in the open market and that the realised loss of about HK$7.87 billion from the disposal would be recorded as “other comprehensive expense” for the year.
In October, Chinese Estates said that the losses arising from the sale of China Evergrande shares had impacted its fundamentals. Chinese Estates lost HK$1.38 billion after dumping 108.9 million shares in the Chinese developer in the open market between August 30 and September 21 last year.
Chinese Estates was the sole cornerstone investor in China Evergrande’s initial public offering about 13 years ago and had since then held 751.09 million Evergrande shares, or 5.66 per cent of the Shenzhen-based developer, as of end of August last year.