About a year ago the prospects of a bounce-back in earnings driven by aviation and property trading led DBS Vickers Securities to maintain its 'hold'' recommendation on Swire Pacific A. Although there was some upside in the stock - the broker's revised one-year price target was $54.50 - its valuation was not low. Office rents were likely to come under further pressure before they stabilised, but most of Swire's other businesses were performing well. Property sales had picked up along with prices since August. Strong passenger figures at Cathay Pacific Airways had led DBS Vickers to raise its estimate of its contribution, boosting full-year 2003-04 earnings forecasts by 8.4 per cent to 15.5 per cent. The broker raised its 2003 dividend per share estimate by 7 per cent to $1.24 because of the turnaround in contribution from aviation, strong balance sheet and improved business outlook. However, the 2003 yield still fell below the sector average of 3.6 per cent. While next year was almost certain to be respectable, a large part of it was priced into the stock. The broker's revised price target was premised on a 10 per cent discount to forward net asset value and 15 times full-year 2004 price-earnings ratio. The counter was trading at about $46.60 at the time. In March Swire Pacific reported an 8.46 per cent fall in net profit for 2003 to $4.92 billion after a second-half property surge helped offset a steep decline in its aviation business. Swire recommended a dividend of $1.34. In August Swire announced a net profit for the first six months of this year of $2.95 billion, compared with $1.18 billion in the period last year. Property business accounted for most of its earnings, while Cathay Pacific contributed about 30 per cent. The counter closed at $62.50 on Friday.