SWIRE SEEN REPORTING 20 PCT RISE IN 1986 PROFIT Swire Pacific Ltd <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 <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 <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.