(Yicai Global) July 19 -- Chinese Estates Holdings Ltd. [HKG:0127] bought over 655 million shares of China Evergrande Group [HKG:3333] for around HKD8.1 billion (USD1 billion), the former said in a filing to Hong Kong Exchanges and Clearing Ltd.

As of June 30, 2017, the holding is around 5 percent of Evergrande's total issued share capital, the statement said.

Chinese Estates, which is primarily engaged in property investment and development, brokerage, securities investment, money lending and cosmetics distribution and trading, said it is optimistic about the overall prospects of Evergrande, which is a leading developer of residential and commercial properties in mainland China.

Chinese Estates rallied on the news this afternoon. After falling briefly, its share price rose sharply to as much as HKD12.08 (USD1.55), up more than 7.8 percent from its opening price. Evergrande rebounded after a slight decline in early trading -- with its share price unchanged from opening at HKD15.8 in the mid afternoon. At that price, the firm's 13.1 billion shares are worth HKD206.9 billion.