Meitu Founder Buys Project in Hong Kong’s Causeway Bay for $96M

Mainland venture investor Mike Cai Wensheng is taking advantage of bargain prices for Hong Kong assets with the billionaire co-founder of selfie app Meitu picking up his second Hong Kong commercial property in three months at a fraction of its former worth.

Cai acquired 20-28 Cannon Street in Causeway Bay from local property firm Winland Group for HK$750 million ($95.5 million) earlier this month, according to local media reports with the prominent tech investor enjoying the benefits of Meitu’s stock price having increased 2.4 times in value this year.

Having sold a number of properties this year in an effort to bail out its balance sheet, Winland parted with the site of the former Sun On Mansion for around a 66 percent discount to what it paid to consolidate ownership of the building.

With Meitu’s stock soaring, Cai has sold HK$1.07 billion in shares in the tech company since February. During the same interval, an investment company helmed by the Fujian-born entrepreneur has launched buyout offers for a pair of Hong Kong-listed investment funds, with Cai’s wife having also picked up a luxury home in the city for HK$465.8 million in May.

Causeway Bay Project

Cai is taking over the 5,388 square foot (501 square metres) site between Jaffe Road and Gloucester Road with Winland said to be halfway through construction of a 26-storey commercial tower on the plot.

Winland Group had purchased 96 percent of the Sun On Mansion from New World Development for HK$2.17 billion ($280 million) in 2018. The developer followed up in January 2021 by acquiring the remaining space in the building through an auction under Hong Kong’s compulsory sale system which valued the property at HK$1.45 billion.

With Winland having paid a total of HK$2.23 billion to consolidate Sun On Mansion, Winland is parting with the property at almost 66 percent less than what it paid for the site. With a fortune estimated by Forbes at $1.8 billion, Cai is picking up the property at a 48.3 percent discount from the valuation used in the 2021 compulsory sale. 

Cai is entitled to develop up to 81,300 square feet of built area on the property which puts the acquisition near Causeway Bay MTR station at around HK$9,225 per square foot of space.

Buying Season

Cai’s Causeway Bay buy comes after the high school dropout picked up Park Aura, a Ginza-style commercial building at 54-58 Electric Road in Hong Kong’s Tin Hau area, from H Development Holdings for HK$650 million in May.

In interviews Cai has said he plans to use his Tin Hau acquisition as a startup hub.

During that same month, Cai’s wife Wang Baoshan bought a HK$465.8 million ($59.7 million) home in Hong Kong’s upscale Jardine’s Lookout area, joining a cohort of wealthy mainland investors scooping up real estate in the city at steep mark-downs from earlier prices.

The purchases come as Cai has taken advantage of a nearly 247 percent increase in Meitu’s stock price this year to sell down his stake in the company to 12.9 percent from 21.85 percent in February, according to disclosures by the Hong Kong stock exchange.

In late June, China Financial Leasing Group, a fixed income fund launched and managed by Wealth Assets Management Limited jointly announced with Longling Capital, Cai’s venture investment firm, that Longling had acquired a controlling stake in the Hong Kong-listed vehicle. 

Longling paid approximately HK$46 million to acquire its position in the fund,  which invests in mainland fixed income securities, after the Hong Kong-listed shares had fallen to less than 4 percent of their 2020 high of HK$3.40. Together with connected parties, Longling launched a buyout offer to acquire the remaining shares in the company.

During this month Cai’s venture firm announced that it had acquired a 50.7 percent in China New Economy Fund Limited for HK$70.9 million after that stock had lost more than 62 percent of its value in the past year. 

Longling and its related parties also made a mandatory buyout offer for the remaining stake in China New Economy Fund, a CITIC launched and managed mutual fund.