Chinese Estates builds 6 per cent stake in Evergrande as stock price quadruples

Chinese Estates, a Hong Kong property developer, said on Thursday it has spent HK$12 billion in the past six months building a 6.2 per cent stake in China Evergrande, as the latter’s stock quadrupled in the same period.

At the same time, Chan Hoi-wan, an executive director of Chinese Estates and the wife of former chairman Joseph Lau, had informed the company she personally held 100 million shares in Evergrande as of noon of Thursday, according to a filing to the stock exchange.

The combined value of their total holding in Evergrande had surpassed Chinese Estates’ own market capitalisation as of Thursday’s market close.

Evergrande, which is China’s largest residential developer, jumped 5.6 per cent on Thursday to a fresh high, before erasing the gains and closing lower by 3.6 per cent at HK$29.2. Still, it has soared 500 per cent so far this year and 300 per cent since the beginning of April.

Chinese Estates fell 0.6 per cent to close Thursday at HK$13.5. Its market cap stood at HK$25.75 billion.

Between April and noon on Thursday, Chinese Estates had acquired 819.5 million shares of Evergrande in the open market for a total of HK$12 billion, the statement said.