CATHAY Pacific statistics show passenger volume for the first five months dropped 5.4 per cent. The decline is worse than analysts expected. They expect next month's interim results will show a drop in profits of at least 20 per cent. A spokesman for Cathay says the strike earlier this year had an impact on its business. However, excluding the strike, passenger volume still dropped by three or four per cent. This is partially blamed on weakening global markets. An analyst for Baring Securities forecasts that Cathay's interim profits could fall by as much as 25 per cent and by 22 per cent over the whole year. - ECONOMIC JOURNAL KO Sheung-chi, managing director of Uniworld, says the rights issue of two weeks ago will benefit the future development of both Chuang's and Uniworld. He says the current share prices do not reflect the asset value of the companies. Mr Ko says earnings for 1992-93 will show excellent growth by both companies, with Chuang's earnings growing by as much as seven times. - ECONOMIC JOURNAL FOLLOWING the pre-sale of a 25-storey Guangzhou residential development last Saturday, more than 60 per cent of the 92 units have been sold. Fung Shiu-to, chairman of Asia Orient, says the response illustrates the strong market demand for high-quality properties at reasonable prices. This market has not been affected by the Chinese austerity programme. It has increased the number of units on sale and the prices will be revised upwards. New average price will be from $248 per sq ft.- ECONOMIC JOURNAL HANG Lung Development recently purchased an industrial complex in Cheung Sha Wan for $600 million, setting a record for the area of $1,600 per sq ft. Property market sources say that since the building is old the site is worth redeveloping. Hang Lung is expected to invest $1 billion, including the land premium. Over the past few years, Hang Lung has rarely invested in industrial sites so the purchase is indicative of the company's optimism in the property market in Cheung Sha Wan.- ECONOMIC TIMES LU Yiu-tung, managing director of K. Wah International, says International Pipe, a subsidiary of K. Wah, should show double-digit growth this year as a result of profits from its mainland business. Since listing in October 1992, International Pipe's share price has performed poorly because construction work has been affected by heavy rain and delays in the airport projects.- ECONOMIC TIMES WORLD International bought back 25,000 shares on July 20 at $8.80 a share. - ECONOMIC TIMES WORLD International and related parties have been acquiring farmland in Tai Po. Up to now, the company has bought 37,000 sq ft. Sources say that the acquisitions are the tip of the iceberg as the company continues to buy land in the area for future development. It is believed World plans a large-scale development in Tai Po. Sources say that World has rarely bought farmland in the past and the purchases are a result of the scarcity and high prices of large plots in more central areas.- MING PAO DENG Shek-kui, finance director of Playmates International, says the company will be cautious about expansion into the mainland toy market. Previously, Playmates had intended to co-operate with Pacific Concord in the China toy market but the plan has sincebeen scrapped. Mr Deng says for the moment the mainland toy business is being fully exploited by Harbour Ring.- MING PAO SHAW Brothers' plans to build a film studio in Shenzhen will require a large amount of capital and securities and analysts forecast that the company will need to raise funds. The plans requires an investment of US$400 million. The mainland side is expected to take a 30 per cent interest and Shaw Brothers, 70 per cent. On this basis, Shaw Brothers will need HK$2.1 billion.- ORIENTAL DAILY NEWS NEW World is to develop two Tianjin properties, one with the regional government and covering two sq km. The other has not been specified.- WAH KIU YAT PO THE share price of Culturecom and Sing Tao both dropped despite the announcement of good results earlier this week. But security sources think this is because of the bearish market, and the prospects of the companies are generally thought to be good. A Nikko Securities analyst points out that the price-earnings ratios of both companies are attractive and their profits over the next year should grow. The PE of Culturecom is seven or eight, while Sing Tao stands at eight or nine.- ECONOMIC JOURNAL THE Sutton, a New York luxury development with 86 units and owned by Hongkong and Shanghai Hotels, began leasing seven months ago and is 80 per cent leased. This exceeds predictions for the first year. Hongkong and Shanghai Hotels bought the Sutton in 1990and spent several million dollars on renovations.- WAH KIU YAT PO SECURITIES analysts believe the cooling of the China economy will deal a blow to some listed companies in Hongkong, with Tian An China one of the first to be hit. An analyst at SBCI says some companies such as Henderson Land and New World Development have large projects in China but they represent a relatively small amount of total investment. Hence, the impact on these large companies will be limited. By contrast, smaller firms will be more directly affected. For example, the sale of mainland properties isa principal source of income for Tian An China. Shell companies with majority interests acquired by mainland companies will also be adversely affected because original intentions to raise funds through acquisitions will be dealt a blow.- MING PAO ISLAND Dyeing reiterates that its plans to redevelop its Kowloon plant have not been finalised.- MING PAO FUND managers believe the Hang Seng Index will fall to 6,500 over the next few weeks at which point they will consider buying shares. An analyst at Credit Lyonnais says the recent falls in the index are due to the selling by institutions but there are signs this selling pressure will decline. Even if the index falls below 6,500 it is likely to receive strong support. The Hongkong weighting of Credit Lyonnais' Southeast Asia Fund has dropped from a peak of 40 per cent to 30 per cent. The fund expects the stock market to rebound in August or September but in the interim expects the Hang Seng to fall a further 300 points.- MING PAO CHAM Hoi-shau, chairman of Tern Properties, says Tern is looking for suitable sites for development. He says the company will focus on Hongkong and has no intention of developing properties on the mainland. Mr Cham says Tern and another local company hope to complete work in June 1994 on a jointly developed shopping mall in Cameron Road, Tsim Sha Tsui. The basement to the sixth floor will be leased. The upper floors will be used for commercial or residential purposes but a decision on their leasing or sale has not yet been made. A sale would bring $7,000 to $7,500 per sq ft. Mr Cham reiterates the company's developments will focus on commercial and residential purposes and will not include industrial sites.- ECONOMIC JOURNAL INFORMATION from the Land Registry shows the Government and Nice View Property have concluded an agreement, with the Government buying units on the fifth floor of Nanfung Commercial Centre, Kowloon Bay, for $98 million. Elsewhere, Carranza and Wisely have reached an agreement, with Carranza selling the 11th floor of Peregrine Tower for $116 million. - WAH KIU YAT PO Chinese Press Digest is produced by Corporate Information Services. For pre-publication service and other services, telephone 865 5006 or fax 865 5835.