* HSI flat, H-shares -0.1 pct, CSI300 +0.4 pct
* Tencent slides after downgrades despite in-line earnings
* China flash PMI briefly lifts markets in early trade
* Investors await flurry of earnings after market close
By Clement Tan
HONG KONG, March 21 (Reuters) - Hong Kong shares were largely flat on Thursday, ahead of a string of corporate earnings while broker downgrades pushed down Chinese internet giant Tencent Holdings, which fell in spite of results that met expectations.
Onshore Chinese markets were headed for a third day of gains, reversing slim early losses after a private preliminary survey of manufacturing activity in the world's second-largest economy in March came in higher than expected.
The Shanghai Composite Index and the CSI300 of the leading Shanghai and Shenzhen listings each went into the midday trading break up 0.4 percent. Both indexes had their best gain in two months on Wednesday.
The Hang Seng Index was flat, while the China Enterprises Index of the top Chinese listings in Hong Kong slipped 0.1 percent in relatively modest turnover.
"Tencent's stock price is obviously hurt by those downgrades today, but there are some people who are buying on dips," said Alex Wong, Ample Finance's director of asset management.
"There might be some short term hiccups with the company's growth, but there are not many Chinese companies with a favourable long term growth story like Tencent," Wong added.
Tencent shares slid 3.7 percent after earlier testing an intra-day three-month low, hurt by downgrades from Deutsche Bank and CLSA despite posting 2012 earnings late on Wednesday that were in line with expectations.
Thursday's losses trimmed Tencent's gain on the year to 1.6 percent, compared with the Hang Seng Index's 1.8 percent slide. In 2012, Tencent surged 59 percent while the index rose 23 percent.
DB analysts downgraded Tencent from "buy" to "hold" while trimming its target price by 8 percent, citing near-term margin pressures from its mobile and e-commerce initiatives that would bear fruit in the longer term.
China Unicom was down 1.1 percent ahead of its 2012 full-year earnings, due after markets close on Thursday. Down 16 percent this year, Unicom is currently trading at a 9.3 percent discount to its historical median forward 12-month earning multiple, according to Thomson Reuters StarMine.
In the last 30 days, 4 of 29 analysts have downgraded their 2012 full year earnings-per-share estimates for Unicom by an average of 2.6 percent, according to StarMine.
China Resources Enterprises rose 0.8 percent ahead of its 2012 full-year earnings. At the midday break, the Chinese food and beverage conglomerate posted a better-than-expected 31 percent rise in 2012 net profit.
Global supply chain manager Li & Fung climbed 1 percent ahead of its 2012 earnings later in the day. The stock is down 23 percent this year, and was trading at a 25 percent discount to its historical median forward 12-month earnings multiple, according to StarMine.