Five analysts polled by Reuters predicted on average that Hutchison, one of the HK's oldest trading houses, will post a profit of HK$9.73 billion (US$1.24 billion), including one-time items, when it posts its results on March 21 for the year ended December 31.

A year earlier, Hutchison posted earnings of HK$34.1 billion (US$4.35 billion), which were larded with one-time gains of HK$25.74 billion (US$3.21 billion).

Hutchison is Asia's fifth-largest company outside of Japan with a market capitalization of US$37.58 billion (US$4.81 billion).

Its 2001 results will depend partly on how it accounts for its vast holdings in the volatile telecoms sector -- including a US$400 million convertible note in bankrupt wholesale carrier Global Crossing, which several analysts expect it to write-down entirely.

Company watchers will also be listening intently for news of progress on Hutchison's plans to launch third-generation mobile phone service in Britain and Italy later this year.

"I don't think there will be much excitement other than the bullish outlook on 3G," said ING Barings analyst Cusson Leung, who rates the counter a "hold" with a price target of HK$73.70 (US$9.4).

As for turnover, DBS Vickers predicts Hutchison will report a four percent increase for the full year to HK$59.3 billion (US$7.67 billion).

Although telecoms account for a small share of revenue, Hutchison's massive investments in the mobile sector make its shares prone to swings in that sector.

What about 3G?

Hutchison's heavy investments in 3G systems in Europe and its bullish stance on the unproven and expensive technology have given many investors the jitters.

Some in the market might expect Hutchison to take a write-down on part of its 3G investment, but Leung of ING Barings said he does not expect that to happen given that Hutchison must build enthusiasm for the service as its launch approaches.

Merrill Lynch said in a research note that it rates the firm a "strong buy" with a target price of HK$83 (US$10.7), although it said the stock will be volatile in the near-term as news on 3G emerges.

Hutchison's container ports business, the world's largest, will likely show that strong performance on the Chinese mainland offset sluggish traffic elsewhere as the global economic downturn dampened trade. DBS Vickers predicted a two percent decline in profit for Hutchison's ports business.

Superman's grab-bag of one-offs

Li's penchant for wheeling-and-dealing has earned him the mantle of Asia's richest tycoon and the nickname "Superman". It also means Hutchison's results statements often read like a laundry-list of exceptional gains and provisions.

For 2001, some watchers expect Hutchison will write-off the entire value of the Global Crossing stake, given that a proposed US$750 million bail-out plan for the carrier put forward jointly by Hutchison and Singapore Technologies Telemedia would leave existing shareholders with nothing. Lehman Brothers expects the firm to take a provision of HK$600 million (US$76.8 million) against two Hong Kong property developments. It forecasts Hutchison will report full-year net income of HK$9.49 billion (US$1.22 billion), or HK$7.8 billion (US$998.4 million) excluding exceptional items.

In the first half of 2001, Hutchison booked a one-time gain of HK$30 billion (US$3.84 billion) on the sale of its stake in US mobile carrier VoiceStream, which was almost entirely offset by provisions of HK$28.1 billion (US$3.59 billion) for the fall in value of its stakes in telecoms giants Vodafone Group and Deutsche Telekom.

Some analysts said they did not expect further provisions for holdings in the two European carriers.

Hutchison's first-half profit sank more than 76 percent to HK$7.19 billion (US$921 million), although core earnings of HK$5.29 billion (US$678 million) slightly beat expectations as the firm's ports business shrugged-off the global downturn.

(People's Daily March 21, 2002)