Chinese Estates’ Joseph Lau pockets HK$15 million paper gain after buying shares of troubled developer Future Land

Joseph Lau Luen-hung, the Hong Kong billionaire owner of Chinese Estates Holdings, is estimated to have pocketed HK$15 million (US$1.9 million) of paper gains in a week through an astute punt in one of China’s biggest real estate developers.

Fair Eagle Securities, a wholly-owned unit of Chinese Estates, bought nearly 40.9 million shares of Future Land Development Holdings on the Hong Kong stock exchange at HK$7.19 per share on July 4, according to the Hong Kong stock exchange’s CCASS Shareholding Search system, displaying the data two days after the transactions.

Shares of the Shanghai-based Future Land, which closed the week higher at HK$7.58 per share, would have given Lau at least a paper profit of 39 HK cents per share. His brokerage continued scooping up Future Land’s shares after July 4, building up a position of 59.776 million shares as of July 10, or 1.01 per cent of the developer.

The shares of Future Land and its Shanghai-listed sibling Seazen Holdings have had a rough two weeks, after the founder and chairman of both companies, Wang Zhenhua, was arrested on a charge of child molestation on July 3. Future Land shares plunged as much as 36.4 per cent over three trading days, while Seazen tumbled by their 10 per cent daily limit for three consecutive days.

The punt by Lau, whose property company sold one single apartment for the whole of its last financial year, underscores how Chinese Estates has been quietly morphing into a financial holding company.

Gains from securities investment ranked as the main engine of income, overshadowing sales of luxury homes and rental income from shopping malls in and office properties in China, Hong Kong, and the UK.