Hopewell Holdings and its Hong Kong-listed subsidiary, Hopewell Highway Infrastructure (HHI), are expected to benefit from the green shoots of economic recovery in the Pearl River Delta. 'We expect [Hopewell's] underlying profit to drop 76 per cent year on year to HK$1.31 billion due to the large exceptional profit booked in fiscal year 2008,' Credit Suisse analyst Cusson Leung wrote in a report. 'However, the stock is a good proxy to get exposure to the economic recovery in the Pearl River Delta.' For the fiscal year to June 2008, Hopewell's net profit jumped 127 per cent to HK$5.97 billion, mainly because of HK$4.79 billion of exceptional gains from selling the Nova City property project in Macau and a joint venture managing the Guangzhou East-South-West Ring Road. Stripping out the one-off items, Hopewell's net profit last fiscal year would have been reduced to HK$1.18 billion. That means Credit Suisse's net profit forecast of HK$1.31 billion for fiscal year 2009 would be 11 per cent higher than last year's earnings. Six analysts surveyed by Bloomberg have a consensus forecast of HK$1.45 billion net profit for Hopewell on revenue of HK$1.05 billion for the fiscal year to June. Infrastructure, operated by Hopewell's toll-road subsidiary HHI, accounts for the lion's share of the group's profit, with property a distant second and hotels third. In property investments, Mr Leung expects that the profit contribution from Hopewell's rental income will rise 37.8 per cent to HK$351 million, driven by its two commercial buildings in Wan Chai - the QRE Plaza and Hopewell Centre - as well as improving occupancy of EMax shopping centre in Kowloon Bay. Mr Leung forecasts that infrastructure profit, contributed by HHI, will grow 10.8 per cent to HK$1.15 billion for the period, accounting for 70.9 per cent of Hopewell's earnings before interest and tax (ebit). 'We expect the infrastructure contribution to increase 10 per cent for [this fiscal year], as we saw a turnaround in the average daily traffic growth of the GS Superhighway from February,' wrote Mr Leung. HHI, 70.3 per cent owned by Hopewell, holds 48 per cent of the Guangzhou-Shenzhen (GS) Superhighway, its main asset. Citigroup analyst Jenny Zhen expects HHI's core earnings to rise 40 per cent for the fiscal year to June, mainly because of traffic recovery in the GS Superhighway with the completion of maintenance work on a section of the highway. Ms Zhen forecasts GS Superhighway's toll revenue will rise 10 per cent to HK$1.75 billion for the fiscal year to June, accounting for 96 per cent of HHI's total toll-road revenue. Excluding exceptionals, HHI's profit will rise 40 per cent to HK$1.17 billion. With the exceptional items, Ms Zhen predicts HHI's net profit would fall 42 per cent to HK$1.17 billion.