Market: Indonesia Company: Jakarta IHD Recommendation: Sell Brokerage: Smith New Court JAKARTA International Hotels and Development (Jakarta IHD) has decided it is time to renovate its ageing Hotel Borobudur. This US$63 million (HK$487 million) project, to start in mid-1995, is scheduled for completion in two years and is expected to cut hotel revenue by about half in 1995. As steady cash flow from the hotel drops, earnings will depend on the ability to sell land at the Sudirman central business district. Despite a 55 per cent discount to net asset value and low debt, the brokerage expects the stock to under-perform in 1995 and 1996. Pre-tax profits are forecast to drop 75 per cent year on year to 15.9 billion rupiah (about HK$55 million) in 1994 and a further 77 per cent in the following year. Market: Indonesia Company: Jaya Real Property Recommendation: Hold Brokerage: Smith New Court JAYA Real Property (JRP), one of Jakarta's first residential property developers, has a strong reputation for quality housing for middle and middle-lower income earners. It has built 8,000 houses in Bintaro Jaya and sold more than 7,000 since 1980. It has increased recurrent income through the low-cost acquisition of two commercial properties outside Bintaro Jaya in late 1993 and will further boost recurrent income through the development of the Bintaro business district, scheduled to start in early 1996. With a sizeable land bank, a 1995 price-earnings multiple of 12.9 times and a 25.2 per cent discount to net asset value, JRP is fundamentally sound but the brokerage does not expect immediate price performance owing to the recent interest-rate rise. Market: Singapore Company: Creative Technology Recommendation: Sell Brokerage: Smith New Court THE decision to add a US$10.4 million write-off for research and development and paper losses in marketable securities back into the accounts significantly boosted last quarter earnings per share above expectations. As forecast, the operation margins have improved from the 6.9 per cent in the first quarter of the 1995 financial year to 9.2 per cent in the second quarter. Slower US growth was offset by surging European sales although lower earnings are forecast as a result of a downward revision for Sharevision products. In the 1996 financial year, the gross margin could stabilise with the shift of product mix towards higher-priced wave-synthesis sound cards. Although the market should react favourably to these results, the trends for a long-term buy are still not visible. Any price strength in the next one or two months on the back of good results should be seen as an opportunity to take profit.