Harbin Power

Stock code: 1133.HK

Last close: HK$13.30

Entry: below HK$15.50

Target: HK$19

Stop loss: HK$13.80

By Castor Pang

Harbin Power's share price has been falling recently as a result of consolidation on the stock market as a whole.

It has continued to drop to HK$10.62 from a record high of HK$29.40, representing an approximate decline of 65 percent.

However, with the Ministry of Finance potentially offering coal purchase subsidies to mainland power plants under pressure from higher costs driven by rising fuel prices, electricity suppliers may be able to invest in new equipment.

This could translate into more orders for companies like Harbin Power, which specialize in manufacturing power generation units.

As a leading supplier of power plant equipment in China, Harbin Power is expected to benefit from growing demand for such products, particularly among power plants that have the capital to boost productivity on the power-thirsty mainland.

Harbin Power's share price rose close to the top of the recent downslide on Tuesday and it may run into resistance in the near future. Because its relative strength index (RSI) and share price have been heading in opposite directions in recent trading, it might be a signal to buy if its share price climbs above HK$15.50.

Investors can acquire this stock when the price rises above HK$15.50 and look forward to HK$19, but should stop loss when it dips below HK$13.80.

The author is a strategist with Sun Hung Kai Financial Group.

China Resources Land Ltd

Stock code: 1109.HK

Last close: HK$15.30

Target: HK$21

Support: HK$14.52

By Lai Wai-shing

China Resources Land Ltd (CRL) saw its profits attributable to shareholders increase by 66.7 percent in 2007 to 1.43 billion yuan.

It owes the impressive performance mainly to an increase of 42 percent year-on-year in the total value of property sales contracts to 5.62 billion yuan, as compared to a 32 percent growth in the area of properties sold last year, which stands at 580,800 sq m.

This means the average property price amounted to more than 9,000 yuan per square meter last year, 50 percent over that of 2006. It also allowed the company's profits margin to reach 47.592 percent in 2007, as compared to 28.75 percent in the year before.

CRL is expected to do well this year, too, because its property sales on the mainland has not been affected by the recent mark-down trend up north and part of the property sales last year will entered in its accounting books this year and add to its 2008 gross profits.

Besides, there is no sign just yet that it has to sell any property at a lower price.

The mainland-centric developer plans to further expand its land reserves by acquiring its mother company's development projects in such premium markets as Beijing, Shanghai and Hangzhou.

CRL management believes 60 percent of its potential buyers in Beijing are looking for homes for themselves rather than profiteering, which is another plus for its accounting health at the end of the day.

The author is a senior independent commentator.

China COSCO Holdings

Stock code: 1919.HK

Last close: HK$24.30

By Cho Fook Tat

Thanks to the spontaneous earnings jump by its newly-acquired dry bulk operation, the company chalked up a 1.3 times year-on-year hike in its FY07 bottom line to 1.9 billion yuan, compared to its pro-forma FY06 net profits of 8.3 billion yuan.

Since China COSCO adopted merger accounting for the acquisition of most of its parent's dry bulk shipment operations for an aggregate price tag of 34.6 billion yuan, which was completed at the end of last year, its historical results are restated to include the contribution of the injected operations.

The newly-injected dry bulk business operated 419 dry bulk vessels totaling 33 million DWT that are self-owned or chartered in a proportion of 39:61 as at FY07-end. Ore and coal are the two main product types, accounting for more than three-fourths of its overall shipment volume.

China COSCO has locked in the freight rates for 54 percent of its dry bulk shipping assignments for this year at a level one-third higher than the average in FY07, which should underwrite continued shipping income growth this year. The target price is HK$32.

An affiliated company(ies) of Taifook Research Limited make(s) a market in the securities herein covered and/or any warrants or options on these securities herein covered.

The author is an analyst of Taifook Securities.

(HK Edition 05/08/2008 page3)