Sun Hung Kai Company Recommendation: Sell Brokerage: Sassoon Securities THE company's prospects will remain static in the near term.
Deeply entrenched in the securities business, Sun Hung Kai's fortunes will continue to be suspectible to local market swings - given its rather narrow earnings base.
The firm's 1994 profits slumped 23.2 per cent to $315.1 million. Last year's hefty contributions from its associates are unlikely to be sustainable.
Sun Hung Kai's high exposure to China will also weigh down its short-term prospects.
Cafe de Coral Recommendation: Sell Brokerage: Salomon Brothers THE brokerage found no positive news during a recent visit to Cafe de Coral's management. In fact, it was warned the firm expects further industry and earnings consolidations next year.
News from the meeting also included higher rental costs, amounting to 15 per cent of sales, and higher price increases of eight to nine per cent. Network expansion will slow, with the number of outlets increasing by only nine per cent this year.
Salomon Brothers predicts earnings will fall 20 per cent this year. The brokerage may cut its 1996 forecast following earnings results.