Twenty residents from a hostel for the mentally disabled who were suspected to have caught Sars might be suffering from a strain of flu that killed two Hong Kong people in January. Preliminary laboratory tests showed that eight out of the patients from the Salvation Army Lai King Home were suffering from Influenza A H3N2, or Panama flu, said Thomas Tsang Ho-fai, a consultant with the Department of Health. All of them were in stable condition last night at Princess Margaret Hospital's fever isolation ward. 'Tests conducted so far do not show any positive signs of Sars. Further tests are being conducted,' said Dr Tsang. Panama flu killed a 10-year-old Sha Tin boy and his 77-year-old grandfather in January. They were believed to have contracted the flu from family members who had picked up the virus on a holiday in Japan. Panama flu has caused outbreaks worldwide in the past two years. In Hong Kong, it was the dominant strain among flu sufferers from January to May this year. The hostel superintendent, Christina Chu Shuk-yin, has said isolation measures had been in place since Monday.