STOCKWATCH: Wharf Holdings -- 2 (steady growth in Modern Terminals, rentals)

At 11:28 am, Wharf was up 0.75 at 19.75, on trade of 1.04 mln shares.	    The Hang Seng Index was up 178.52 points at 12,761.88.	    Cusson Leung, an analyst with ING Barings, said his house is positive about the business prospects of Wharf Holdings, given Modern Terminals' stable contribution and i-Cable's gradual earnings improvement.	    Wharf Holdings owns a 79.40 pct stake in i-Cable, which made a 2000 net profit of 20.16 mln hkd from a loss of 236.86 mln the previous year.	    This afternoon, Wharf is expected to record a 2000 net profit of 2.43 bln hkd, with 14.0 pct growth in core earnings, Leung said.	    He agreed that it would be unfair to compare the 2000 results to 1999, when there was an exceptional gain from the public flotation of i-Cable.	    "i-Cable has turned profitable ... there was steady growth in Modern Terminals. There was a recovery in rental income, with strong contribution from Gateway (in Tsim Sha Tusi)," he said.	    Leung did not include a provision in his earnings forecast, as the company is likely to get rid of any potential losses from its Sham Tseng project, if it is priced right and launched skillfully.	    In 1999, Wharf made a provision of 1.50 bln hkd for its property developments, compared with 676 mln hkd a year earlier. 	    Some analysts are worried that Wharf may need to make a provision for its Sham Tseng Project, because of a high development cost of 3,500-3,600 hkd per sq ft, including a land premium of 1.86 bln hkd to the government.	    The Sham Tseng Project is expected to be launched this year at the earliest.	    "It would be a marginal case, but we did not include a provision for the 2000 results," Leung said.	    He said his house has a "buy" recommendation for Wharf, with a target price of 24.0 hkd. 

Related stock : (NIL)