CITIC Pacific

Stock code: 0267.HK

Last close: HK$33.60

Entry: current level

Target: HK$36.50

Stop loss: HK$30

By Patrick Shum

CITIC Pacific achieved an increase of 31 percent in annual profits last year, mainly driven by special earnings. Its price-to-earnings ratio has fallen to seven times since it published the 2007 results earlier this week, while its dividend ratio remained above 4 percent.

Its special-purpose steel production business did particularly well last year, with an annual profit growth of 68 percent to HK$2.23 billion.

The company acquired a 30-percent stake in a coal mine in Shandong province and invested in a magnetite mine in Western Australia, further reinforcing its raw material operations' development. It also added 12 bulk carriers to its iron-ore-shipping fleet.

It should be noted, however, that coal prices are expected to hit the ceiling this year, while international commodity prices are also likely to be adjusted, which could affect Citic Pacific's raw material operations.

Investors may buy this stock at its current price for a short run up to HK$36.50, but should stop loss at HK$30.

The author is the executive director at Karl Thomson Investment Consultants Limited.

Hutchison Whampoa

Stock code: 0013.HK

Last close: HK$74.85

Target: HK$83.35

Support: HK$70

By Lai Wai-shing

Hutchison Whampoa Ltd's (HWL) 2007 profits attributable to shareholders reached HK$30.6 billion, 53 percent more than 2006. The result is close to the bottom of market estimates, which ranged from HK$30.3 billion to HK$3.54 billion.

The performance apparently had something to do with its 3rd-generation (3G) mobile-phone service provider called 3 Group, which recorded HK$17.94 billion in losses before interest, taxes, depreciation and amortization (LBITDA) in 2007. The sum is only 10 percent less than that of 2006, when it achieved a 45 percent drop in LBITDA.

The good news is 3's earnings before interest, tax, depreciation and amortization (EBITDA) in 2007 is a positive HK$1.20 billion, compared with HK$7.49 billion in 2006.

HWL's real estate and hotel businesses reported only HK$9.55 billion in annual earnings and HK$4.01 billion in earnings before interest and taxes (EBIT), a drop of 11 percent and 28 percent respectively. Its retail business saw an increase of 11 percent in annual earnings to HK$1.11 billion last year; while its port operations earned HK$37.89 billion for 15 percent jump over 2006.

The author is a senior independent commentator.

China Shipping Development

Stock code: 1138.HK

Last close: HK$24.00

Entry: HK$22.50

Target: HK$25.00

Stop loss: HK$21.50

By Castor Pang

Continued economic growth on the mainland has kept demand for oil and coal rising, which inevitably leads to an increase in shipping demand as well. This helped China Shipping Development achieve an increase of 64 percent in annual profits last year.

The company's management has predicted strong results in the first quarter of 2008, expecting profits to grow by 50 percent, and it is forecasting an even larger growth rate in annual terms with dry and bulk shipping in short supply.

As for its share price, it has been moving upward since hitting the previous low of HK$11 in November, and it cleared the 10-day and 50-day moving averages in recent days as it rallied from the bottom of the recent upswing.

Investors may buy this stock at HK$22.50 and look forward to a rise to HK$25, but should stop loss at HK$21.50.

The author is a strategist with

Sun Hung Kai Financial Group.

(HK Edition 03/31/2008 page2)