BLUER than blue, Swire Pacific's interim results might have disappointed but the old hong looks a buy on weakness compared to its major rivals. Disappointing first-half results stemmed from the difficult trading environment of Cathay Pacific and, more importantly, the less-than-expected pre-sales of its Robinson Place Tower 2 development in Mid-Levels. The 1994 and 1995 earnings forecasts have been reduced to reflect new market realities, but earnings quality remains strong and a pick-up in property sales in the second half of the year should secure the bottom line. Standard Chartered Securities has reduced its 1994 net profit forecast from $6.24 billion to $5.95 billion but slightly upgraded the 1995 figure to $7.84 billion after the company's interim results. At this level, Swire Pacific trades at a lower price-earnings ratio than Hutchison Whampoa and CITIC Pacific and that is where the upside lies. Cathay Pacific, which used to contribute about 50 per cent of the group's earnings, will continue to face tough times as average passenger yields fall, but since that number should be diluted to about 20 per cent in 1994 the impact has been reduced. As a counterbalance, Dragon Air has registered staggering growth, indicating its future as a significant Asian carrier, particularly in China. Property development in Hong Kong lies at the heart of Swire's business and the second half of this year should see it book the remaining $950 million from Robinson Place Tower 2. Now the largest office landlord in eastern Hong Kong island, it will continue to benefit from centrally based companies moving to lower-cost areas such as Quarry Bay. A full-year rental contribution from Devon House and an expected seven months by Dorset house is forecast to boost pre-tax rental profits by 18.7 per cent in 1995. In general, the group's investment property division has shown handsome growth with strong rental revisions, but continued growth depends on the prime office rental market. Adding fizz to the stock is top management's excellent relations with Beijing, which positions it as a major player in property development and aviation on the mainland.