Listed company under Hong Kong tycoon Liu Luanxiong$CHINESE EST H (00127.HK)$This morning, it soared 40% in early trading and continued to rise nearly 30% in the afternoon. The stock has risen for three consecutive days and the share price has reached a new high since November 2023. So what action did Liu Luanxiong, as a stock godlike figure in Hong Kong, take to make his listed company's stock price soar?

Chinese Estates Holdings is soaring.

This morning, Chinese Estates Holdings suddenly soared nearly 40%. It also rose continuously in the previous two trading days and its share price reached a new high since November 2023. As of the time of publication, Chinese Estates Holdings has risen 20.16%, to HKD 1.49 per share. Chinese Estates Holdings is owned by Liu Luanxiong and his wife, Josephine Chen Camille. There was a change in the stockholding position, and this is the first abnormality since the privatization failed in 2021.

Against the backdrop of an apparently unfavorable overall environment, Chinese Estates Holdings suddenly moves. So what bullish stimuli does it have? According to the data from the Central Clearing and Settlement System (CCASS), there were 231 million shares or 12.1% of Chinese Estates Holdings shares deposited into CCASS on Wednesday last week (19th), and stored in Fabrica, which is at the closing price of HKD 1.14 on that day, with a market value of approximately HKD 263 million. The share held by Fabrica originally only accounted for 0.02%.

As shown in the annual report, Liu Luanxiong and Josephine Chen Camille together hold 74.99%, or about 1.431 billion shares of Chinese Estates Holdings, which has reached the upper limit of 75% threshold, of which 231 million shares are directly held by Joseph Lau Luen Hung Investments Limited, which is likely the same group of shares as the warehousing. The market believes that Liu Luanxiong may have subsequent capital operation actions.

In 2021, Chinese Estates Holdings proposed a privatization plan and planned to repurchase about 25% of public shares in the open market, with a cancellation price of HKD 4 per share, a premium of about 37.9% over the closing price of HKD 2.9 per share on the day of short suspension of the company, involving a total of HKD 1.908 billion. After the privatization is completed, Chinese Estates Holdings will delist from the Hong Kong stock exchange, and Josephine Chen Camille and her concerted action parties will hold all the shares of the company directly. According to its previous plan, the company will be delisted on January 24, 2022. However, it was rejected because the affirmative votes did not exceed half, and the privatization failed for the third time. Currently, the offer price of HKD 1.58 per share is much lower than the privatization price.

On March 15, 2024, Chinese Estates Holdings announced that the company's surplus attributable to owners in 2023 was HKD 76.832 million, and in 2022 it was HKD 1.152 billion. From the data, Chinese Estates Holdings' profit has experienced a cliff-like decline.

Where will Chinese Estates Holdings go?

Over the years, Chinese Estates Holdings has had close ties with Evergrande. So after Evergrande, where will Chinese Estates Holdings go?

According to Chinese Estates Holdings' 2021 annual report, the company's dividend income from Evergrande fell to HKD 157 million. In the previous year of 2020, the income was as high as HKD 1.97 billion. At the same time, Chinese Estates Holdings also crazily reduced its holdings of 630 million shares of China Evergrande, causing a huge loss of more than HKD 3.5 billion that year.

In 2023, Chinese Estates Holdings began to cut off from the past. That year, the securities investment and financial asset product portfolio it held remained only HKD 342 million, accounting for a continuous decline from 3.6% at the end of 2022 to 1.8% of the total assets. The size of non-public securities investments is only HKD 290 million. Chinese Estates Holdings has returned to its main business.

Data shows that Chinese Estates Holdings currently owns investment and development properties including shops in Causeway Bay, office projects the Haxell Building in Wan Chai, a 25-story commercial/residential building in Shum Shui Po, a 33-story industrial building in Kwun Tong, and a redevelopment project in Tsuen Wan.

In addition, there is a shopping center, Olympian City Phase III, in West Kowloon (25% stake) and Sino Plaza (15% stake), A joint venture residential project, Kaihui, composed of four residential buildings in Kwun Tong, and a commercial/residential land in Kai Tak jointly acquired in September last year with a total construction area of 992,300 square feet.

In mainland China, Chinese Estates Holdings has a 50% stake in the Beijing Hilton Hotel and owns equity of a 10-story commercial building called the East International Building next to the Beijing Hilton Hotel.

In the UK, Chinese Estates Holdings owns four assets in London, including Fleet Street No. 120, consisting of a permanent right office building named River Court and a two-star historical building called the Daily Express Building, which is currently undergoing reconstruction and revitalization. There is also a permanent right office building at No. 14 St George Street; a permanent right mixed-use project at No. 61-67 Oxford Street and No. 11-14 Soho Street; a permanent right mixed-use project at No. 11-12 St James's Square and No. 14-17 Ormond Yard, and these projects are currently undergoing asset enhancement.

Veteran sniper

Liu Luanxiong, born on July 21, 1951 in Hong Kong, with ancestry from Chaozhou, Guangdong, is also known as Big Liu; his younger brother Liu Luanhong is known as Little Liu. In 1978, Liu Luanxiong and his friend Liang Yingwei founded the Euromax company, which specialized in producing ceiling fans. At that time, he also earned his first bucket of gold. Later, he made a killing in the stock market. In 1985, Liu Luanxiong suddenly sold his shares in Euromax and left the company, causing the stock price to plummet from HKD 4 to HKD 0.7. Later, he took advantage of the low price to buy back shares in the market, and half a year later, he regained control of Euromax. In 1986, he acquired Chinese Estates, a company with a history of 60 years, and subsequently embarked on his career as a stock sniper. Liu Luanxiong specializes in targeting companies whose controlling rights are unstable, and has successfully sniped Nengda Technology, controlled by the Zhuang family, HK& China Gas (00003.HK), controlled by Li Ka-shing, and The Peninsula Hotels (00045.HK), controlled by the Kadoorie family, among others. Except for Chinese Estates and Chinese Entertainment, which are kept as flagship companies for listing, he sold his shares back to major shareholders at high prices for all others.$HK & CHINA GAS (00003.HK)$and the Kadoorie family's$HK&S HOTELS (00045.HK)$, all of them successful.

Edited by Jeffrey