ONE of Emperor International Holdings' biggest challenges is to convince investors that it has shed its image as a deal-maker more intent on making money than building a solid financial base. The management concedes this is a problem that has overshadowed its strategic moves to become a property development and investment company with an attractive land bank. ''Historically, we were seen as very speculative because we concentrated all management efforts on doing business and making money,'' said managing director Vanessa Fan Man-seung. ''The reality of how we conduct business has changed. We have become a financially strong group and it's only a matter of time before investors get to know this.'' Changing investors' perceptions will be a major undertaking and the company has begun efforts in that direction. A public relations department was set up last month and the management went on a roadshow to Europe to promote a well-received 50 million Swiss franc (about HK$262.8 million) convertible bond issue. The appointment of former Australian Prime Minister Bob Hawke as a non-executive director last month was a savvy move to boost Emperor's profile and its already tight connections with China. Last Friday, Emperor held a presentation for 60 institutional fund managers and analysts and they were given extensive information about the company's operations and future plans. Simon Yeung, an analyst with Daiwa Institute of Research, said Emperor had not commanded investor attention because its performance had been nothing special in recent years. Previously sceptical and biased by the speculation surrounding Emperor in the marketplace, Mr Yeung said he was now impressed by the company's investment and development property portfolio in Hong Kong and by its strong financial position. He expects the company to start receiving more attention as investors looked for undervalued property counters. The performance of Emperor's stock has started to reflect increased interest, climbing sharply in recent months to 89 cents, just off its 52-month high of 92 cents. This gave it a prospective 1994 price-earnings multiple of 4.5 times and prospective 1995 PE of 3.6. Investors have been forced to digest a lot of information about Emperor in the past month. Early this month it completed a complex deal to sell 70.9 per cent of Emperor (China Concept) Investments to a mainland-controlled consortium, which included tycoon Li Ka-shing. Under the deal, Emperor sold its stake for $987.6 million and it bought back from Emperor China a 33.89 per cent stake in Hong Kong Daily News, the Emperor Group Centre in Hennessy Road and all its interests in China. Emperor also bought from the consortium three leases in China and the Chinese Bank Building on Des Voeux Road in Central. Essentially, the deal allowed Emperor to streamline its corporate structure while providing the consortium with a listing vehicle. A week later, Emperor sold Wang Kee Building to an independent third party for $880 million, chalking up a hefty profit of $206 million from the building bought just in November last year. While the sale did little to temper Emperor's reputation as a deal-maker, Ms Fan said the sharp jump in property prices left the company little choice but to profit from the situation. Emperor's stature with investors also received a significant boost this month when the company announced a massive jump in profits to $161.7 million from $2.3 million for the six months to September 30. Turnover climbed 35 per cent to $577.8 million from $427 million. Ms Fan said Emperor's strategy was to build a secure base in Hong Kong while expanding into China, where there were opportunities to generate higher returns. The company's business would now see 35 per cent of its assets in China, 40 per cent in Hong Kong investment properties and 25 per cent in Hong Kong development projects. Ms Fan said the company's mainland relations were different because the Ministry of Justice - through China Tian Ping Economy and Culture Development Corp - was a shareholder with a five per cent interest, allowing it to participate in Emperor's projectsand stock appreciation. ''We see our connection with the mainland authorities as a relationship for the long term,'' she said. ''For assisting us to do business, they get actual benefit.'' Emperor has a large land bank in China, with development properties in Xiamen, Shunde and Xin Hui. Daiwa's Mr Yeung said it was still too early to determine if China's property taxes and currency-related issues would affect Emperor's earnings. Ms Fan said Emperor was still optimistic about Hong Kong's property sector, particularly the luxury sector. ''With the airport project and overseas companies coming here, a lot of expatriates want to come to Hong Kong and many Chinese officials see Hong Kong as a gateway and they need luxury flats here,'' she said. Emperor hopes to cash in on this demand with the development of a site in Cox's Road, Tsim Sha Tsui, which will be completed in June next year. Another site in Tsat Tsz Mui Road, North Point, was completed last month and 30 per cent sold. The Cox's Road project will be Emperor's main source of development profits in the next fiscal year with pre-sales expected to start in the first quarter of this year. Emperor's property portfolio also includes the three-star Richmond Hotel in Happy Valley, which was acquired for $305 million last month. With both the commercial and residential property sectors both experiencing a jump in prices, the revaluation of portfolios by Henderson Land Development and Sino Land in recent months has caught investors' attention. Emperor managing director Wong Chi-fai said the company planned to complete this exercise next month to determine its intrinsic value. Its Hong Kong properties were valued at $2.27 billion on March 31 last year. Mr Wong said the company had cash reserves of $300 million and expected to receive an additional $1.7 billion in the next six months from the sale of the 29-storey Emperor Group Centre in Wan Chai and Wang Kee Building. He said the money would be used to increase the company's property portfolio. Emperor also has ambitious plans for Hong Kong Daily News Holdings, which publishes the Hong Kong Daily News, the territory's fourth-largest daily Chinese-language newspaper. Last month, Daily News received a licence to sell its weekly Hong Kong Economic Digest in China, making it the first local magazine to circulate a weekly on the mainland. Mr Wong said there were plans to expand Daily News' publishing activities in China, including a joint venture to participate in the newspaper sector. Daily News also owns the Ulfert's furniture chain and while there are no immediate plans to spin off the profitable operation, Ms Fan said it was a possibility in the future.