Chinese Estates’ profit down

Chinese Estates has recorded a 17.7% drop in net profit for 2016, a week after the company announced a major share restructuring. For the year to December, net profit was HK$6.36bn (£67m), down from HK$7.72bn last year. The company attributed the fall to a drop in rental income and smaller gains in revaluation due to continuing asset disposals. Rental income fell 34.5%, while revenue increased 142% to  HK$3.75bn as a result of sales of major assets. The company said the decline in net rental income was mainly due to the disposals of subsidiaries holding Windsor House, Evergo Tower in Shanghai, MassMutual Tower and The One in Hong Kong. In the UK, however, the company has been active in acquiring assets in 2016, to the value of £690.7m. Acquisitions included 14 George Street, W1, and 61-67 Oxford Street, W1. The company also revealed a HK$2.36bn unrealised loss on its investment in Shengjing Bank. Shares in Shengjing Bank, in which Chinese Estates holds a 37.46% stake, fell by 36% in the past 12 months to close at HK$7.21. Former chairman of Chinese Estates Joseph Lau has distributed his 74.99% stake in Chinese Estates to his children owing to a “very unstable health condition”, according to the company’s filing to the Hong Kong Stock Exchange on 1 March. The share restructuring was completed on the same day. The share restructuring means Lau’s son, chairman Lau Ming-wai, will indirectly hold 476.4m shares, representing 24.97% of Chinese Estates, through Century Frontier. Joseph Lau has also distributed 954.2m shares, representing 50% of the company, to Sino Omen, whose shares are held by Chan Hoi-wan, as a trustee for her children Lau Chung-hok, 4, and Lau Sau-wah, 9, in the ratio of 65:35. To send feedback, e-mail Shekha.Vyas@egi.co.uk or tweet @shekhaV or @estatesgazette