I noticed that the virtualization group suggested you to look into how KVM does what you are trying to replicate (type 2 hyper-visor).
Not sure if you followed up my entry there but you can run a simple guest instance in HiKey 16.06 by installing kvmtools (either from source or via apt) and execute:
$ lkvm run --console serial -c2 -m256 -k /tmp/Image -n mode=user,trans=mmio -p "console=ttyS0 earlycon=uart,mmio,0x3f8"
[be sure to pass an uncompressed Image to lkvm: if you dont pass a kernel image, it will attempt to load bzImages/vmlinuz from /boot which obviously wont boot].