Many people just do not realize the Hang Seng Index is no longer guided by the fortunes of Wall Street. I mean the Dow Jones Industrial Average gained just 1 percent last year while the HSI advanced more than 20 percent.

The two indexes have gone their separate ways, that is they have decoupled, gradually over a long period of time.

So, as far as Hong Kong is concerned we should keep our focus on quality stocks that are unlikely to disappoint investors in the Year of the Rat. Take for example, HAECO, a unit of Swire Pacific, involved in overhauling, modifying and maintaining aircraft in the territory and the mainland.

Year on year, its interim net profit jumped more than one-third to HK$548 million. Turnover rose 21.3 percent to HK$2.229 billion. Profit from Hong Kong operations gained 50 percent to HK$214 million. Man-hours sold for heavy maintenance work climbed 47 percent to 1.31 million hours while line maintenance movements grew 6 percent to an average of 260 aircraft per day.

Net profit contribution from HAECO's 45-percent owned Hong Kong Aero Engine Services rose 27 percent to HK$160 million last year. A third hangar in Hong Kong and a sixth hangar of TAECO in Xiamen are expected to start operations in the next 16 months. The delay in delivery of Airbus A380 and Boeing 787 aircraft will hurt business.

But Dr Check expects the firm to announce promising results for fiscal year ending March 31.

From mid-2005, HAECO has risen from HK$50 to a high of HK$246 in December, up almost 4 times in just two-and-a-half years.

The recent 25 percent correction in the stock makes it attractive.

Note: Dr Check and/or The Standard bear no responsibility for any investment decision made based on the views expressed in this column.