PROFITS at construction firms are being squeezed by aggressive bidding, says an official at Hsin Chong Construction Group. Deputy chairman Yeh V-nee said yesterday reckless tendering was pruning returns and keeping the sector depressed. Speaking at the company's annual general meeting, he said: 'There are too many contractors who have lost tendering or pricing discipline. 'When they tender for contracts the profit margins are being squeezed substantially.' Hsin Chong, one of Hong Kong's most respected construction firms, fared better than most last year but admitted that its results were only 'satisfactory'. Net profit for the year to March 31 rose 1.9 per cent but earnings per share fell seven per cent. In the past few years Hsin Chong and other construction firms languished as rising costs and falling contracts undermined profits. After reaching a high in 1991, the combined revenue of the 20 largest Hong Kong construction firms fell. Margins at the high end of the industry are beginning to pick up but those at the lower end see little improvement. Stiff competition has stifled margins. 'Free market forces will ultimately prevail,' Mr Yeh said. 'The money that has been lost by the industry will instil more discipline.' Shareholders at the meeting approved the final dividend of 4.5 cents per share.