Varitronix International Recommendation: Buy Brokerage: Seapower Securities DESPITE the completion of two new factories last year, liquid crystal display (LCD) manufacturer Varitronix is already planning to build two more plants. A plant in Heyuan, Guangdong, started operations in February this year, while the other, in Penang, Malaysia, opened in September last year. Varitronix plans to split its existing plant in Shawan, Guangdong, into two and, in another move, it recently bought industrial land at Heyuan for an eight-storey LCD factory. The firm will begin production this year of its new handheld terminal with a two-dimensional, touch-sensitive screen. The stock is currently trading at a 1994 prices-earnings ratio of 14.6 times. Guangzhou Investment Recommendation: Buy Brokerage: Smith New Court GUANGZHOU Investment's core property business is expected to contribute 70 per cent of total earnings over the next few years despite increased contributions from the company's industrial projects. Diversification into paper and cement production will not only strengthen the company's recurrent income base and fuel growth but will also facilitate the transformation of Guangzhou Investment into an aggressive conglomerate. The brokerage expects the firm's net profits to rise 45 per cent this year and 25 per cent next year. Tungtex Holdings Recommendation: Buy Brokerage: Smith New Court STRONG sales in the United States and an improvement in profit margins have led to an upgrade in Tungtex's earnings forecasts. The performance of the company's 60 per cent-owned US designer label, Anne Pinkerton, is improving, but progress is still below expectations. The company is financially healthy, with gearing estimated at 50 per cent. Most of its borrowings are to do with trade financing and are thus repayable within one year. Hopewell Holdings Recommendation: Hold Brokerage: South China Securities IN THE second half of this year, Hopewell will sell 20 Broadwood Road, which is expected to contribute about $1.2 billion to profits for the year. However, a $700 million bonus for the early completion of the Guangzhou Superhighway will not be received because of delays in construction. Rental income in the second half is expected to sit at $287 million. Income from Hopewell subsidiary Consolidated Electricity Power of Asia is estimated to increase 75 per cent to $222 million, mainly from a rise in the sale of electricity and interest income from the issue proceeds of new shares. Beiren Printing Machinery Holdings Recommendation: Sell Brokerage: PBI Securities BEIREN'S final results for last year were five per cent above the prospectus forecast of 80 million yuan (HK$71.2 million). Interest savings from the initial public offering improved profit margins. However, sales of a high-margin, international standard, multi-colour offset press developed by the company only accounted for 13 per cent of total sales in the second half of the year. The counter will lack spice until it increases its product prices.