STOCKWATCH: Henderson Land lower after results, but outperforms sector/market

HONG KONG (AFX-ASIA) - Henderson Land Development Co Ltd shares were lower in early trade after weaker than expected interim results, dealers said.	    However, the stock outperformed the overall property sector and broad market, with the company's business outlook still seen as positive, they said.	    At 11:00 am, Henderson Land was down 0.30 or 0.78 pct at 38.10 on volume of 1.66 mln shares.	    The Hang Seng property sub-index was down 210.87 points at 16,462.33 and the Hang Seng Index was down 181.63 points at 12,440.22.	    Henderson Land posted net profit of 2.096 bln hkd for the six months to December, down from 4.476 bln a year earlier.	    "The results were actually below market expectations, which were around 2.2 to 2.4 bln hkd," Nomura International (HK) analyst Gary Chan said.	    Chan attributed the lower profit to the price discount policy for the company's unsold flats during the six months.	    "Unfortunately even though the company sold the flats at a discount, demand was still weak," he added.	    However, he said the sales in the first two months of 2001 have been "quite satisfactory."	    "We expect the sales in the second half of the company's fiscal year to improve further," Chan said.	    In addition, he said the company is likely to maintain sustainable net rental income growth at about 1.2 bln hkd for the full year.	    On the property market overall, Chan said he is optimistic that volumes will increase in 2001 but prices may remain under pressure until confidence recovers.	    "The stimulus to the present property market is interest rates. With additional cuts, the mortgage rate is lower than the rental rate in some residential units, largely the small-sized ones, which is definitely attractive to the potential home buyers especially those that have high deposit savings."	    Chan said he plans to lower his full-year earnings forecast for Henderson Land slightly to 4.3 bln hkd from the original 4.4 bln in light of the interims.	    Given that the stock is currently trading at a 13 to 14 pct discount to net asset value, he said he has a long-term "outperform" rating on the stock. 

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