STOCKWATCH: Hysan sharply lower after results

HONG KONG (AFX-ASIA) - Hysan Development shares were sharply lower after the company reported lower-than-expected 2000 results yesterday, dealers said.	    Hysan's income this year will solely rely on rentals from its existing 4.67 mln square foot Causeway's Bay portfolios as there are no expected new developments or property sales during the period, they added.	    At 11:13 am, Hysan was down 1.15 hkd or 9.38 pct at 11.10 on volume of  465,000 shares.	    The Hang Seng Index was down 285.63 points at 12,938.23.	    The company reported 2000 net profit of 850.17 mln hkd, against most in a year earlier.	    The decline in its 2000 profit was attributed to lower revenue generated from property sales and a 10 pct fall in rental incomes last year, they said.	    Jim Yip, an analyst with Asia Financial (Securities) said, "We have concerns over the rental performance of its office portfolio, which comprises 59 pct of the total portfolio. As a decentralised office location, Causeway Bay faces increasing competition from other decentralised locations, namely Tsim Sha Tsui and Quarry Bay.	    "The rather mixed tenant profiles in this office area means tenants are more likely to move should there be more attractive offices in other areas," he added.	    Yip said the demand for office space is likely to be flat out in 2001 amid a slowdown in U.S. economy.	    Despite Hysan having a high occupancy rate of over 90 pct in 2000, Yip said he expects the company will remain cautious in raising rents during the current year.	    He said his house has a 'hold' recommendation on the stock, with its P/E ratio seen rising to 14 times.	    "The growth prospect from Hysan in the coming year will not be too impressive. We expect a 6.0 pct growth," he said.	    An analyst with a local brokerage said the company has gained more than 200 mln hkd from its disposal of investment securities, including mainly from sales of China Mobile shares during the year.	    "Hysan currently has about 30 mln hkd worth of China Mobile shares on hand. It is difficult to forecast when it will further dispose of its securities," the analyst said.	    The analyst said his brokerage has a 'buy' recommendation on the stock, with a price target of around 4.20 hkd.

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