Hong Kong property developer Chinese Estates books profit, offloads HK$185.3 million in Evergrande shares

The company swung to a HK$870.6 million profit in the first six months of the year, from a HK$35.5 million loss a year earlier, according to an exchange filing

The Hong Kong developer has dumped more than half of its shares in the debt-ridden mainland home builder

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The Grand Central development in Hong Kong’s Kwun Tong district on May 28, 2021. Chinese Estates’ stake in the project yielded a HK$950 million dividend. Photo: SCMP / Edmond So

Published: 4:41pm, 17 Aug 2022Updated: 4:57pm, 17 Aug 2022

Chinese Estates Holdings, the Hong Kong developer controlled by the family of fugitive property tycoon Joseph Lau Luen-hung, swung to profit in the first six months of the year as it disposed of more than half of HK$364.6 million (US$46.5 million) worth of shares it held in debt-ridden mainland developer China Evergrande Group.

Chinese Estates booked a profit of HK$870.6 million in the January to June period, a reversal from a HK$35.5 million loss in the same period a year ago, according to a filing with the Hong Kong exchange on Wednesday.

Revenues rose about 63 per cent to HK$1.18 billion as the group recognised HK$950 million in dividend income relating to a 10 per cent stake it owns in Grand Central in Kwun Tong, the filing said. The project, developed by Sino Group, has four tower blocks and 2,000 residential units.

Chinese Estates did not declare an interim dividend, with chairman Lau Ming-wai citing the need for prudence amid the uncertain global economic outlook.

The Chinese Estates Holdings office in Hong Kong, pictured on March 5, 2021. Photo: Bloomberg

The developer’s shares closed 0.4 per cent higher on Wednesday at HK$2.26.

Without new home projects in recent years, Chinese Estates had instead bet big on the acquisition of shares and dollar-denominated junk bonds issued by Evergrande, the world’s most indebted property developer.