HONGKONG Land, the largest landlord in Central, has a fairly predictable, but uninspiring, earnings flow. Analysts expect to see an anemic one per cent net profit growth to $2.4 billion with earnings per share up a similar amount at 91 cents. Its 4.87 million square-foot Central office and retail portfolio forms an almost unbreakable mantle supporting earnings and profits. Its recent investment in Trafalgar House is not expected to show major returns for some time as the British conglomerate sorts itself out, having suffered losses in the long recession in Britain since 1990. More than three-quarters of the group's profit comes from office rents, and the rest from retail rents. In the past five years the stock has performed in line with the index, rising 222 per cent against 247 per cent. The annualised compound return was 37 per cent. Last year it outperformed the index by 16 per cent, and on the year-to-date it outperformed the index by eight percentage points, having fallen 16 per cent against 24 per cent on the index. Questions surrounding the group are more to do with long-term corporate strategy than with short-to medium-term earnings. Ever since the shift of domicile to Bermuda in 1984, the group, led by parent Jardine Matheson Holdings and the controversial Keswick family, has been shrouded in rumour and speculation. The rumour mill went into top gear over the past three years as the market wondered whether a wholesale sell-down of the Central property portfolio would be taken ahead of 1997. Analysts commented every time the group sold some of its Central portfolio that it had effectively been penalised by a loss in substantial earnings and capital value as values and rents surged in the territory. Key properties sold by the group include the World Trade Centre, Fleet House, the Excelsior Plaza, Silvercord and Nine Queen's Road which, with the benefit of hindsight, were completed at giveaway values. At a time when corporate strategy in Hong Kong has ground to a halt, domestic rents and capital values have rocketed. But the group has been diversifying its investment base both in earnings and geographic spread. In a dawn raid on the London Stock Exchange in 1992 the group grabbed a substantial stake in Trafalgar House, leading to a 14.9 per cent holding by year-end. The company has spent $2.57 billion on building its stake in Trafalgar House to 25.3 per cent. This is likely to rise to 29.9 per cent in the medium-term. Jardine group's antipathy towards China has meant its image has been dogged by political controversy. This has even extended to the Trafalgar House holding which this year has found itself in the midst of a trade dispute between London and Kuala Lumpur, which still threatens valuable infrastructure deals in Malaysia. Of Trafalgar's $4 billion turnover, $1 billion is from Asia. The stake is of significant strategic importance to Hongkong Land. However, how it will develop is not clear to many investors and analysts. The group is the largest consortium member in the Tsing Yi suspension bridge project. In another diversification which has had a fair share of political controversy attached to it, Hongkong Land has a share in Container Terminal 9. It is a 25 per cent holder in a consortium to build the new terminal with a cost attributable to the group, said Baring Securities, of between $1.25 billion and $1.5 billion. This project requires the approval of China. Some analysts are concerned that the current reclamation in the Central area, with the development of new land-supply and office areas, could threaten the dominance of Central as a core office area as tenants decide to move into the newer, more pleasant office environment now planned. Baring Securities also said: ''As a member of the Jardine Group, Hongkong Land remains vulnerable to being placed on the 'hit-list' by China although the actual impact on earnings is immaterial in the medium term.''