SWIRE SEEN REPORTING 20 PCT RISE IN 1986 PROFIT

  Swire Pacific Ltd &lt;SWPC.HKG> is
  likely to show a more than 20 pct rise in 1986 operating
  profits when it reports results tomorrow, reflecting gains in
  its aviation and property businesses, share analysts said.
      Analysts polled by Reuters estimated after-tax profits from
  operations will be between 1.525 billion and 1.8 billion dlrs
  compared with 1.23 billion in 1985.
      They also said Swire will have an extraordinary gain of
  about 1.38 billion dlrs from the flotation of its Cathay
  Pacific Airways Ltd &lt;CAPH.HKG> unit last May.
      Swire had an extraordinary gain of 59.1 mln dlrs in 1985.
      Share analysts said Swire will set a 36 cent final dividend
  for its "A" shares, making a total of 54 cents, after 47 cents
  adjusted for a two-for-one bonus issue in 1985.
      Aviation and properties together account for 75 pct of the
  company's net asset value and about 85 pct of its net profits,
  analysts said.
      The company's aviation division consists of its majority
  stake in Cathay Pacific Airways Ltd and its 25 pct interest in
  &lt;Hongkong Aircraft Engineering Co Ltd>, which is also 25 pct
  owned by Cathay.
      Cathay last week reported 1986 profits climbed to 1.23
  billion dlrs from 777 mln in 1985, partly because of lower fuel
  costs and greater traffic.
      Swire's share of Cathay, which stood at 70 pct before the
  flotation, fell to 54.25 pct at the end of last year and has
  since slipped to 50.23 pct.
      Hongkong Aircraft reported this month its 1986 net profits
  rose 29.5 pct to 115.5 mln dlrs.
      Tony Measor, an analyst at Hong Leong Securities Ltd,
  estimates Swire's profits will be 1.525 billion dlrs.
      "Much depends on properties," said Measor. "And they did a lot
  better in the second half of the year."
      Estimates of profits from the firm's wholly owned Swire
  Properties Ltd unit range widely from 500 mln dlrs to 700 mln
  compared with 570 mln dlrs in 1985.
      Swire Properties recorded an interim profit of 120 mln dlrs
  for the first half of 1986, well below 260 mln dlrs for the
  same 1985 period, but analysts said that was due mainly to the
  low level of completion of new residential flats. The firm's
  properties consist mainly of the Taikoo Shing residential
  development and two luxury housing projects.
      Hoare Govett Asia Ltd said the completion of 1,100 flats in
  Taikoo Shing will have yielded profits of 300 mln dlrs in
  second-half 1986.
      During the year property prices continued to rise as more
  people bought real estate, benefiting from low interest rates,
  analysts said.
      "At the end of last year, flats in Taikoo Shing were selling
  at 1,100 dlrs per square foot, up by about 20 pct from a year
  ago," said Frederick Tsang of Mansion House Securities (F.E.)
  Ltd.
      Swire is developing a large commercial and hotel complex in
  the central business district of Hong Kong but it will not
  provide income until the first stage is completed next year.
      The company also sold three properties and a part interest
  in a proposed hotel development, which should result in
  extraordinary gains of 60 mln dlrs in 1986, according to James
  Capel (Far East) Ltd.
      Swire's trading and manufacturing operations are expected
  to earn 300 mln dlrs, up 22 pct from 1985 but its shipping and
  offshore services are likely to post a small loss of about 10
  mln dlrs because of depressed market conditions.
  

