THE latest stock market surge has been so focused that a number of stocks have been virtually left behind. Concern over mortgage lending ceilings has restricted the performance of the developers, but with its full-year results soon to be announced, Hang Lung Development looks exceptionally attractive. The company's earnings profile is looking increasingly dynamic, with the healthy increase in residential prices so far, and it is also anchored by a strong recurrent income base from its 51.5 per cent owned property investment arm Amoy Properties. At yesterday's closing price of $12.10, the shares are 11 per cent below their high for this year and offer substantial upside potential. Baring Securities is forecasting net profit for the year to June to increase by eight per cent to $1.59 billion, putting the shares on an historic price-earnings multiple of 9.8 and yield of 4.6 per cent. With last year's results out of the way, investors' attention should focus on 1993-94, which will be an exceptionally strong year, based on the company's development schedule. The two major contributors will be sales of the Hanley Villa development in Tsuen Wan, and the Tai Hing Garden project in Tsuen Mun. Barings is forecasting net profit to jump 31.3 per cent to $2.12 billion, putting the shares on a PE of 7.4 and a yield of 5.3 per cent. This becomes even more attractive after stripping out the contribution from Amoy Properties and Grand Hotels, which leaves Hang Lung's development earnings on a ridiculous PE of less than four. The announcement of a 47 per cent increase in the number of building unit deals last month should put the focus firmly back on Hong Kong's property developers, which are all seasoned players of the market and will have been riding in on the wave of residential property prices. The one negative factor for Hang Lung is the size of its land bank, which at 4.3 million sq ft will only carry the company through to 1996. However, the China factor, which crippled sentiment towards the stock market last month, is a blessing to companies like Hang Lung. It is committed to two projects in Shanghai, but earnings from these will not come through until 1995 and 1996, so the short-term austerity programme should have little impact. The bonus of this programme is in wiping out the Chinese speculators who have been forcing up land prices. To comfort investors apprehensive about property developers, 35 per cent of Hang Lung's earnings last year came from Amoy, which represents an extremely strong earnings base - and further diversification is offered through 67 per cent owned Grand Hotels. Downside should be limited by a net asset value which Barings estimates to be $16.15 billion.