Sun Hung Kai Properties is primarily engaged in property development and investment and is also involved in hotel ownership, construction, finance and insurance. DBS Securities recently upgraded its stock recommendation to market perform as the counter's valuation has become more attractive due to a fall in price of more than 25 per cent since early July. The brokerage said its view that the counter was relatively cheap was supported by the Kwok family's purchase of 1.64 million shares in their company worth more than $91 million in the second week of October at an average price of $55.80 per share. The brokerage placed a 12-month price target of $64 on the stock, saying the downside was limited in a relatively stable residential market environment. The company earnings will perform poorly over the next two years, according to DBS Securities, but will pick up again in the year to June 2002 as the company fine-tunes its development schedule to cope with structural changes in Hong Kong's residential market. Combined with modest growth in other areas of its business, earnings should grow by 13 per cent in the year to June 2002. The company is likely to step up its land-conversion programme from its combined industrial and office land bank of 4.62 million square feet. A successful conversion of these sites could boost net asset value by 2 per cent, and increase urban exposure and competitiveness. Stephen Seawright