HSBC and Pacific Basin Company result analysis

It was a pretty good week for the HSI. It has gone up to 21000 points then come back to end at around 20700 points. To be honest I am quite disappointed with the result of HSBC and Pacific Basin. Especially to HSBC result. So before I go on with the market outlook, I will talk about the result analysis briefly. With HSBC (5), it shown a decline in Profit before tax of about 20% compare to year 2008. Despite this, the company had made a pretty good job in reducing its tax. Thus making it Profit after tax of $6.6 Billion which was a slight increase compare to year 2008. So it other words, you can say its net profit after tax is almost the same as the year before. But if you look at the EPS, you can see a decrease from 41 cents US to 34 cents US. It is mainly due to the share right issue, which cause a dilution effects on the EPS. For the year 2009, HSBC is pay DPS of 34 cents US. Which means it is giving out 100% of its profit to its owner/shareholder. And for Pacific Basin (2343), its shown a decline in profit of about 70%. Which is expected by most brokers because of the effect of economic crisis. I hope this is going to be the least profitable year for Pacific Basin and with the ongoing economic recovery, I am still very optimistic about the company future. With a DPS of 0.23 cents HK, considering my buy price of $5.35, I should be getting a dividend return of around 4.2% p.a. In conclusion, I will continue to hold on to these two companies.

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