Hutchison Whampoa Recommendation: Buy Brokerage: DBS SecuritiesWHILE Hongkong International Terminals' (HIT) Kwai Chung operations will begin to feel the pinch as the territory's container terminals reach capacity, Hutchison's overall strategy should result in subsidiary HIT sustaining a compound growth rate of 13 per cent to 1998. Terminal operations in Yantian and the development of Felixstowe, Britain, and Shanghai will make up for Hong Kong capacity constraints. Hutchison is expected to have 11 per cent compound growth through to 1998.Wharf (Holdings) Recommendation: Sell Broker: Sassoon Securities THE last phase of Wharf's Cable Tower in Tsuen Wan is expected to be ready for sale this month at an average of HK$1,983 per square foot. Although the group has built up a strong recurrent income base with its premier investment property portfolio, uncertainty about the realisation of future property development profits will hinder earnings growth in the next three years, making Cable TV's losses more apparent on Wharf's bottom line. Hysan Development Co Recommendation: Hold Broker: Sassoon Securities HYSAN is considering the issue of US$125 million in five-year guaranteed convertible bonds by a wholly owned subsidiary. Proceeds raised will be used to repay certain bank loans as well as for general corporate purposes. On a fully diluted basis, earnings per share will drop from about 11.7 per cent over the next three years to 10.4 per cent in 1997. Trading at respective price-earnings multiples of 15.3 and 15.4 on 1995 and 1996 earnings, the stock is considered fairly valued. Sinocan Holdings Recommendation: Buy Broker: Salomon Brothers THE company said expansion plans were proceeding as scheduled. Two new easy-open can lines should start test runs by the end of this year but will not contribute to earnings until next year. It said any downside risk to 1995 and 1996 forecasts lay in the start-up costs of the new can machinery. Its low-end profit estimations are still between $190 million and $200 million.
