''WE try to keep a low profile,'' says Hon Kwok Land Investment's director Herman Fung Man-hei, explaining his reluctance to be photographed for this article. Anonymity is a plus for the directors of a company known for its ability to assemble cheap land banks through long-term site amalgamation and zoning conversion. Easy identification of staff with Hon Kwok Land, a niche property developer set to boost its profits substantially during the next two years, makes harder bargaining and higher prices likely the next time a parcel of non-core area land comes up for grabs. Hon Kwok saw its profits increase by 197 per cent for the half-year to September 1992, on the strength of shrewd timing of residential and commercial project pre-sales on relatively cheap land. Hon Kwok has unloaded most of its residential portfolio but has several commercial property projects still on its hands - good news if residential property prices have not found their bottom or the commercial sector its peak. Brokers expect earnings in 1993 and 1994 to rocket. But a big question remains for Chinney Investments, which holds 43 per cent of Hon Kwok Land. Can its earnings dynamo reassemble its land bank and/or find a new strategy to guarantee the repeat of such strong growth in coming years? Chinney Investments is just over 50 per cent controlled by Mr James Wong Sai-wing's family-dominated Chinney Holdings. Mr Cha Chi-ming, whose CDW Holdings had a 26 per cent stake in Hon Kwok until 1990, is Mr Wong's father-in-law. Chinney Investments is diversified into construction, garment manufacturing and trading, property development (via its stake in Hon Kwok) and the electronics business through a 20 per cent holding in Management Investment & Technology (MIT). But, short of an unexpected upturn in Hongkong's construction sector or rapid expansion in the garment business, Chinney Investments' profitability will go where Hon Kwok leads it. In 1992 Hon Kwok contributed about 56 per cent of Chinney's profit after tax and before extraordinaries. It will be higher this year. Chinney's construction arm is split into three units. One does the majority of Hon Kwok's work; another arm tenders for Hongkong Government jobs and is facing a squeeze on margins due to a general slowdown and fierce competition; a third works for Japanese developers in Hongkong. Mr Fung agrees the sector faces a lean year, with recovery perhaps coming in the second half. ''But we're not too worried - we have $300 million worth of projects ahead of us.'' Chinney's garment business is at a crossroads. The group has shut its manufacturing operations in Hongkong, as have so many peers during the past decade. Most relocated to China, where costs are low and quality rising. Chinney instead increased operations in Indonesia where it is protected should the United States decide not to renew China's Most Favoured Nation trade status. ''We are trying to expand our garment business,'' says group financial controller Raymond Cheung Wing-choi. ''We'll be trying to increase our value-added and non-quota production, which will require improved quality, and at the same time do more on the trading side.'' Chinney faces considerable challenge trying to muscle into this area as many other Hongkong garment groups have the same idea. However, it is in better shape than some rival garment makers. Only 30 per cent of its production goes to Europe, where the market faces at least two soft years due to continued economic woes there. The rest is destined for the US, where most observers expect a recovering economy to translate into greater sales volumes and perhaps slightly increased margins. ''For the coming two years, the potential is much better in garments than construction,'' says Mr Fung. Chinney's 20 per cent stake in MIT gives it exposure to the consumer electronics business and, if MIT's plans come to fruition, to China's retail market. MIT started out as a calculator maker in 1975 and over time has moved into smoke detectors, electronic scales and light fixtures. Recently it announced plans to establish a wholesale and retail network in China for its lighting products and electronic scales. Its end-of-year target is 50 outlets in 10 cities. Chinney bought a 24.9 per cent stake in MIT in 1989, but sold down to 20 per cent in an October 1991 public offering. Chinney is content with the size of its MIT stake, but Mr Fung will not rule out the possibility of Chinney investing in other China ventures as yet unnamed. ''We see many proposals, some of which are interesting,'' he says. Chinney will see its purse swell soon: the average of five brokers' forecasts gathered by The Estimate Directory reckons that Hon Kwok's profits will hit $197 million in the year to March 1993, a 160 per cent increase on 1992. The same five expect profits in 1994 of $307 million. One broker not included in the survey, DMT Securities, reckons Hon Kwok will do even better, tipping the company to make $420 million in 1994 and pay an 8.5 per cent dividend yield. DMT's bullishness is based on Hon Kwok having only one big residential project left unsold - a 35,000-square-foot mixed residential-commercial site due for completion this year - and optimism about the prospects for commercial property in Causeway Bay. Where others see oversupply coming because of several big projects - including Wharf's Times Square - coming on line soon, Hon Kwok sees opportunity. ''We like the Causeway Bay area,'' says Mr Fung. ''We considered it had good potential in 1987 and started buying one street number [individual property] at a time, and bought our Irving Street early in 1991 from EIE and got it at a very good price because everyone was talking about oversupply coming. ''But we think that, while prices won't increase there as quickly as in Central and Tsim Sha Tsui, even more people will be attracted to the area by all the new activity.'' With three fully owned commercial sites of 190,000 sq ft in Causeway Bay due for completion in 1994-95, Hon Kwok is willing to talk pre-sales at any time. ''We always say 'a tree does not grow to the sky'. Sell when the demand is there instead of waiting too long,'' says Mr Fung. Hon Kwok acknowledges that rebuilding its land bank, now down to less than 300,000 sq ft, is essential to its future, but the patient chess-board style of accumulation is not the group's only strategy for obtaining sites. ''There still are chances out there in Causeway Bay, around the Lee Theatre area,'' says Mr Fung of possible targets for the $400 million to $500 million it will spend on replenishing its land bank. ''But we'll also be looking at industrial property and trying to gauge properly the land premium to be charged by the Government for conversion. And there is always China.'' Hon Kwok has invested overseas, generally with good results, snapping up property in Kuala Lumpur and last year a residential complex in Los Angeles. Until now China has remained out of bounds. ''We have some colleagues studying property proposals in China, which every developer must consider these days,'' says Mr Fung. ''Sooner or later we will have to invest there. ''We'll probably concentrate on several big cities and for China we may follow a different strategy, but we will have the same spirit.'' Hon Kwok has done well in Malaysia, where it bought one Kuala Lumpur office and retail property worth about $315 million which is 95 per cent occupied and generating $18 million in net rental income. Although Hon Kwok is pleased with this deal, Mr Fung says Hon Kwok does not expect to buy again soon in Kuala Lumpur, and it plans to hold on to the property. The group tells a similar, if not more potentially remunerative, story about Los Angeles, where last year Hon Kwok was made an offer it could not refuse on a 346,000 sq ft upmarket residential complex. ''We entered the US as a financial exercise,'' explains Mr Fung. ''The seller arranged 75 per cent finance on a fixed basis over five years and we put up 25 per cent. ''We bought the property for about US$55 a square foot, much cheaper than replacement cost and cheaper than some places in China these days. Already we are in positive cash flow. I wish we had more deals like that in Hongkong.'' However, a foray into Canada ''has not been very successful'', says Mr Fung. Kerkhoff Industries, an American Stock Exchange-listed property developer and construction materials group in which Hon Kwok holds 10.4 per cent, came close to collapse. Hon Kwok made a provision of $6.2 million against the deterioration of its investment in the first half of 1992, and now has adopted a wait-and-see attitude on what direction new owners will chart for the company. In the meantime, Hon Kwok is trying to use political uncertainty in Hongkong to its advantage. ''We're trying to make the most of the current situation,'' says Mr Fung. ''The vendors are not so firm about their asking price. Until recently the price was dictated by the sellers. Now the developers have a chance.''