Profit worries beat Hong Kong shares down 3 pct

* Shimao slides after share placement

* Property stocks slump as price wars weigh

* New listing Silver Base disappoints amid weak market (Updates to close)

HONG KONG, April 8 - Hong Kong shares slid 3 percent on Wednesday on worries over battered corporate bottom lines amid the global downturn in the first quarter but carmaker Dongfeng Group soared on reports of record March vehicle sales.

New listing Silver Base was a victim of Wednesday's sell-off, opening well below its issue price and staying depressed through the day.

Shares in the company, which distributes products made by Chinese liquor maker Wuliangye Yibin debuted at HK$3.05, against the issue price of HK$3.45, which came at the top of the indicated range. The stock finished 9.9 percent lower at HK$3.11.

The benchmark Hang Seng Index was down 454.11 points at 14,474.86, led by a 5.6 percent drop in HSBC.

"The market has run out of good news to trade on," said Tanrich Securities investment manager Jackson Wong.

The main index has piled on 28 percent from this year's low, hit on March 9, on hopes of stabilisation in the U.S. economy and a faster recovery in China. Blue chip stocks command valuations of around 12 times their estimated earnings, a vast improvement from the decade-lows they plumbed at the nadir of last year's slump.

"This pullback is not necessarily a bad thing. Hong Kong stocks still look poised for bigger gains with support from China where people are starting to factor in a recovery by the end of the year," said Patrick Yiu, associate director with CASH Asset Management.

Bourse operator Hong Kong Exchanges & Clearing slid 5.7 percent to HK$81.90, retreating from its recent strong gains as turnover on the exchange slowed this week.

On Wednesday, Morgan Stanley predicted HKEx shares would fall over the next 30 days, relative to the main index, after outperforming the market by 40 percent in the past month.

Turnover rose to HK$60.8 billion compared with Tuesday's HK$50.9 billion.

Esprit sank 5.9 percent to HK$41.35 after the world's No. 6 fashion brand announced it was replacing its chief executive Heinz Krogner with Ronald Van der Vis, who will take over on or before Nov 1.

Investors are concerned about Van der Vis's lack of apparel industry experience. Van der Vis was previously CEO of Pearle Europe B.V., a privately owned global optical retail group.

PROPERTY COMPANIES PULL BACK

Local property counters pulled back sharply after strong gains in recent sessions on signs of an early recovery in demand in the recession-battered sector.

Cheung Kong Holdings fell 5.5 percent to HK$71.95. Local media reports on Wednesday said Li Ka-shing's flagship property developer had kicked off a price war in Hong Kong's New Territories by pricing apartments at a 10 percent discount to the secondary market price.

"Developers are still relatively cautious on pricing as the economic situation remains uncertain. In addition, the relatively low prices for the project would cause downward pressure on secondary market properties in nearby areas," Citigroup analysts wrote in a report.

With unemployment trending up, the recent "technical rebound" in secondary market prices is unlikely to be sustainable, said Citi, maintaining its forecast of a 20 percent decline in residential prices in 2009.

Shimao Property tumbled 12.7 percent to HK$6.72 after the Chinese developer sold 282.3 million new shares to raise HK$1.94 billion ($250 million), The issue was priced at a 9.7 percent discount to Tuesday's closing price.

More than 330 million shares in Shimao changed hands in the morning session.

On Tuesday, the company said it expected its 2008 profit to fall since it had not completed any new significant investment properties during the year.

The China Enterprises Index of top mainland firms was 2.6 percent lower at 8,546.71 but Dongfeng closed 5.7 percent higher on expectations vehicle sales on the mainland in March were at a monthly record.

Shares in Aluminum Corp of China (Chalco) dropped 4.6 percent after Alcoa reported a second consecutive quarterly loss on Tuesday, as metal prices slumped and global demand fell.