China Southern Airlines Recommendation: Sell Brokerage: ABN Amro CHINA Southern Airlines provides commercial airline services to the mainland, Southeast Asia and other parts of the world. It has the most extensive domestic network of mainland airlines. The slowdown in its home market is the big worry for China Southern, especially because it has yet to alter its expansion plans. Volume is growing slowly, and pricing has been on a downward trend since late last year. 'The omens for the [mainland] aviation market are not good,' ABN Amro says. The broker tips a 73.3 per cent drop in full-year net profit, to 305.3 million yuan. HSBC Holdings Recommendation: Strong buy Brokerage: Clarion Securities Asia HSBC HOLDINGS is one of the world's biggest banking and financial-services organisations. Its network comprises more than 5,500 offices in 79 countries. Clarion says concerns about asset quality and funding costs at SAR banks have been overstated. It says the bank's liquidity position is better than small banks' and the mismatch between its assets and liabilities denominated in Hong Kong dollars is much smaller. 'The overall impact on net interest income should be much less than on the rest of the banking sector,' the report said. Hutchison Whampoa Forecast: Underperform Brokerage: Salomon Smith Barney HUTCHISON Whampoa is a conglomerate operating in six broad business areas - infrastructure, manufacturing, ports, property, retail and telecommunications. Its biggest shareholder is top businessman Li Ka-shing. The SAR economy's sharp contraction probably will cause Hutchison to continue to underperform, and its share price already has dropped. The mobile-phone wars also have reached a new intensity, with operators basically giving away handsets. This will make it extremely difficult for the group to maintain margins, according to the broker. China Resources Beijing Land Forecast: Long-term buy Brokerage: Merrill Lynch CHINA Resources Beijing Land is involved in construction, property management, property sales, demolition and resettlement. Merrill Lynch has placed long-term buy and intermediate-term accumulate recommendations on the stock, saying it is the best 'housing-reform' play. The broker says the stock is trading at a 39 per cent discount to its estimated net asset value. It has a low-cost land bank, enabling it to achieve margins of 40-50 per cent. Following a recent placement, the group is in a strong financial position and has minimal leverage.