Sino Hotels Recommendation: Buy Brokerage: Seapower ALTHOUGH the decline in Hong Kong hotel rooms seems to have halted, a continual increase in room rates is undermining regional competitiveness. Limited airport capacity and rising costs are also hitting visitor growth. But with occupancy of high and medium-tariff hotels rising in the first five months of the year, Sino is expected to sustain its growth and outperform the hotel industry average this year.

Dairy Farm Recommendation: Sell Brokerage: Sassoon Securities DAIRY Farm plans to spend US$300 million in the current financial year to strengthen its retail network and tap into other regional markets. Although longer-term benefits are immense, drawbacks are rendering it unattractive in the short to medium term. Given these concerns, Dairy Farm is likely to underperform the market, at least in the near future.

Esprit Asia Recommendation: Sell Brokerage: Smith New Court START-UP operations in Taiwan and South Korea will significantly pressure operating margins. Market share is weakening owing to increased competition, while product expansion has been slow. Earnings for financial year 1995 are expected to fall 10.8 per cent over 1994, while core earnings should advance only seven per cent.