HONG KONG -- Hong Kong's investors ought to know better, but once again, they've stormed the barricades and bought a technology company that not only lacks earnings or meaningful sales, but which is still in the process of developing its actual products.

No matter. Last week, the city's biggest landlord,

Sun Hung Kai Properties

(SUHJY)

successfully launched its

Sunevision

subsidiary on Hong Kong's new second board, the

Growth Enterprise Market

. As expected, the stock closed 45% above its issue price, which was off the day high of 65%.

Recent history has not been kind to Internet offerings on the GEM or Growth Enterprise Market. Portal

Hongkong.com

shot up after issue on March 9, but saw its price cut in half in six days.

Tom.com

, the almost

product-less IPO controlled by Sun Hung Kai's main rival, property tycoon

Li Ka-shing

, soared from an issue price of HK$1.78 ($0.22) to HK$15.35 ($1.97), but is now 28% off its high.

More ominously for holders of Sunevision and other stocks in the formerly go-go telcos and Net sectors, is the fate of another recent IPO on Hong Kong's main board: Mobile phone company

Sunday Communications

TheStreet Recommends

(SDAY)

. On its first day of trading this month, Sunday Communications actually dropped finishing more than 5% below its issue price.

The first to get hurt if Sunevision turns sour could be the retail investors who actually believe some of the hype pitched at them by institutional sellers. "We haven't seen much institutional calling on this. It's been more retail," said Gurinder Kalra, Internet analyst at

Morgan Stanley Dean Witter

, after Sunevision's debut.

Like a lot of its Internet counterparts, Sunevision is deep in the red. Sunevision lost more than $2 million in the second half of last year, on sales of $4 million. But those sales were for what is intended to be just a small part of the business.

The company hopes to capitalize on the fact that its parent is the biggest developer and landlord in Hong Kong. If it can wire up its buildings with proprietary cabling and content, the thinking goes, it can make big money.

Problem number one: As with Tom.com, Sunevision's products are largely still in the "rollout" phase. Tom.com is counting on filling a market niche with an English-language site still in development.

Take

SuperHome.net

, for example. This Sunevision product, according to the Web site, "adds an extra dimension to the quality of life in selected SHKP

Sun Hung Kai Properties-developed and managed residential properties. The localized Intranet or Internet portal connects residents with their managers, retailers and local amenities." Yet while one experimental operation began just last month, the company says that "the service will be rolled out during 2000." If that happens after September, the company's insiders would be free to dump their shares before the service ever comes to pass.

The second potential problem is execution. Some wonder: What in the world does a Hong Kong property developer know about delivering compelling content? In a city where the most expensive apartments have chipped tiles, crummy paint jobs and indifferent maintenance companies owned by SHKP, why should Sun Hung Kai be able to guarantee a high level of service for its

iAdvantage

service center maintenance business? Ditto the level of service fulfillment once anyone buys anything off the embryonic Internet auction sites.

Remember, Hong Kong real estate developers are used to a captive market without the kind of cutthroat competition you see in the technology field. In Hong Kong real estate, the government doles out land in huge chunks to a handful of big developers. In the technology arena, only those with a compelling product tend to survive.

There is something elegant about the way Hong Kong's craze for dot-com stocks mirrors the one for "red chips" in 1997. At that time, anything headquartered and listed in Hong Kong and owned by the Chinese government was massively oversubscribed, until the Asian crisis revealed the rotten finances and hollow business plans of some of these mainland buccaneers. The worst offenders were the companies of southern Guangdong province, several of which went bankrupt in early 1998. Creditors, who loaned a lot of money on the basis of "comfort letters," implying quasi-sovereign backing for the money they advanced, have had to write off loans worth billions.

Step forward Herbert Hui, a former regulator with the Hong Kong stock exchange and now Sunevision's managing director. His previous job? Managing director of red chip

Guangdong Investment

, which is still in the process of renegotiating with its creditors. There is no doubt that Hui knows how to head for the hottest sector of the day, but for investors in Sunevision, the hope has to be that Hui did a better job picking companies this time around.