Midland Realty expects property transactions in the secondary market to be the main growth driver for its business in the coming year as the appetite of developers for selling their housing stock seems to be diminishing. The estate agency plans to open 10 new branches in the next two months - initially it planned to open only six - to meet the increased business.

Daiwa Institute of Research (DIR) says it continues to see Midland as a turnaround stock with high leverage. It estimates that fixed annual overheads are less than HK$700 million but the company can tap a market for which turnover was $153 billion in 2002, a depressed year.

September was an excellent month for Midland as transactions in the primary and secondary markets reached the highest point since 2000. DIR estimates commissions at more than $150 million, substantially higher than Midland's fixed monthly overheads of about $56 million. Although market transactions have slowed since the middle of last month because of higher asking prices in the secondary market (25 per cent revisions or more have been common), the group's monthly transactions in the secondary market should have exceeded 4,000, compared with 3,878 in August.