PREVIEW-Hutchison, Cheung Kong H1 net seen sharply lower

* What: Hutchison Whampoa and Cheung Kong H1 results

* When: Thursday, Aug 21

* H1 net seen falling on lower gains from disposals

* 3G arm may move into EBIT positive in late 2008

By Alison Leung

HONG KONG, Aug 19 (Reuters) - Hutchison Whampoa (0013.HK), controlled by billionaire Li Ka-shing, is likely to post a 71 percent fall in first-half net profit on lower income from asset sales, but its underlying profit should rise, thanks to a strong performance at Husky Energy (HSE.TO) and improved 3G business.

Earnings at sister firm Cheung Kong (Holdings) (0001.HK), the city's second-largest developer by market value, should fall by a similar degree as it owns nearly half of the ports-to-telecoms conglomerate, according to analyst forecasts.

Cheung Kong and Hutchison, the twin flagships of the bespectacled, 80-year-old Li's multi-billion dollar empire, are set to announce mid-year results on Thursday.

Hutchison's third-generation (3G) telecoms network is expected to trim operating losses by half to HK$5.7 billion as subscriber churn slows and handsets get cheaper

The business in which Hutchison has pumped about $25 billion, may finally stop bleeding and report its first monthly operating profit in late 2008 after eight years of losses.

"This would be viewed positively by the market," said Jonas Kan, an analyst at the Daiwa Institute of Research.

Hutchison group's free cashflow should improve and will allow Hutchison to accelerate the pace of acquisitions, such as in ports, taking advantage of falling asset prices globally, analysts said.

"The company had previously announced the setting up of a global water treatment operation, and we believe there could be acquisitions on this front as well," Credit Suisse analyst Cusson Leung said in a report.

Hutchison, which operates in 57 countries with holdings ranging from drug stores and supermarkets to property and telecommunications, launched a new division in March to tap rising demand globally for water treatment.

Falling asset prices could however further forestall its long-discussed spinoff of Italian telecoms unit 3 Italia.

Lingering concerns over a global economic slowdown and a weaker Hong Kong property market after a booming 2007 are expected to put pressure on shares in Hutchison and Cheung Kong.