Being behind bars has not stopped the founder of a Chinese appliance seller from booking gains approaching $1 billion in Hong Kong's surging stock market.

Huang Guangyu, the businessman jailed in 2010 for bribery and insider trading, has seen the value of his stake in Gome Electrical Appliances Holding Ltd more than double to about $900 million since April as Chinese mainland investors take advantage of reduced trading restrictions and pour money into the Hong Kong bourse.

The Beijing-based electronics retailer was, as of the close of trading on Wednesday, one of the Hang Seng Composite Index's best-performing stock this quarter since the H-share rally began April 8. The company was boosted by perceptions that it is undervalued compared with rivals, according to Citigroup Inc and CCB International Securities Ltd.

"I wouldn't be unhappy that my wealth has doubled, but equally it has nothing to do with anything the company has done," said Andrew Sullivan, head of sales trading at Haitong International Securities Group Ltd in Hong Kong. "It's all to do with the perception of the company."

Huang's windfall is another consequence of a market rally that has inflated the wealth of some of Asia's richest men to dizzying heights. As of Wednesday's close, Dalian Wanda Group Co Chairman Wang Jianlin had seen his wealth surge 45 percent this quarter to $43.8 billion, while Fosun Group Chairman Guo Guangchang gained 33 percent to $8.4 billion, according to the Bloomberg Billionaires Index.

Gome's shares have soared 114 percent to HK$2.40 (31 cents) since April. That added HK$7.04 billion to the value of the 32.4 percent stake Huang holds with his wife, Lisa Du Juan, according to data compiled by Bloomberg.

Gome rose as much as 6.6 percent to HK$2.44 on Thursday, as Hexun.com reported Huang could soon be eligible to be released from prison on parole as he nears the mid-point of his jail term.

Huang, who was once China's richest man, was sentenced to a 14-year prison term. Despite a failed post-conviction bid to win control of Gome's boardroom, Huang and his wife remain the company's largest shareholders, according to the company's 2014 annual report.

Huang could not be reached for comment. Zhang Sujing, an investor relations executive for Gome, said the company did not have information on any potential early release for Huang and declined to comment further.

Wagers that the company's share price will decline have also eased. Short positions represented about 10.4 percent of Gome's outstanding shares as of Tuesday, versus a four-year high of 15.3 percent on April 27.

Gome, which operates more than 1,000 stores selling televisions, washing machines and other appliances, is benefiting from the establishment of programs to allow cross-border stock trading between Hong Kong and the mainland financial hub of Shanghai. The prospects of a similar tie-up with the southern city of Shenzhen is also driving interest in the company, Citigroup said in a report.

Gome is trading at about 21 times expected next year's estimated earnings, according to data compiled by Bloomberg. Its Shenzhen-listed rival, Suning Commerce Group Co, which is forecast to lose money this year, is trading at hundreds of times.

"Liquidity played a very important role in pushing up the share price of Gome," said Forrest Chan, a Hong Kong-based analyst with CCB International.