* Hang Seng Index near five-month, mainland shares weigh
* Shanghai stocks slip ahead of holidays, volume slips
* Local property plays up in HK, Cheung Kong gains 1.6 pct
* BYD Co extends gains, advancing 17 percent in two days
* Tsingtao hits life-high ahead of Mid-Autumn Festival
(Updates to close)
By Vikram S Subhedar and Chen Yixin
HONG KONG/SHANGHAI, Sept 20 (Reuters) - Shares in Hong Kong closed flat while Shanghai shares slipped on Monday in thin volumes as investors trimmed positions ahead of regional holidays and with U.S. markets offering little direction.
Hong Kong's benchmark Hang Seng Index closed little changed at 21,977.3 near a five-month high, while Shanghai Composite Index dipped 0.4 percent to a five-week closing low ahead of long holidays starting this week with gains in financials not big enough to offset losses in small caps which succumbed to profit-taking.
"The thin volume shows investors have no intention to buy shares ahead of the holidays," said Chen Shaodan, an analyst at China Development Bank Securities in Beijing.
Analysts said investors were selling shares to raise cash ahead of the long Mid-Autumn Festival and National Day holidays starting on Wednesday and to limit their exposure over the next three weeks.
Turnover in Shanghai fell to a three-week low at 90 billion yuan ($13.40 billion) on Monday from 94 billion yuan on Friday.
Banks recovered some of last week's losses which came on the back of speculation that the authorities would impose more stringent capital requirements on China's financial institutions.
Industrial and Commercial Bank of China (ICBC) was up 0.3 percent. Beijing Bank was up 0.9 percent while Bank of Communications gained 1.6 percent.
Those gains were not enough to keep the broader market in positive territory as investors preferred to lock in gains in sectors that had recently outperformed, such as pharmaceuticals.
Drug makers were among the biggest losers with Hangzhou Tian-Mu-Shan Pharmaceutical dropping by its 10 percent daily limit, while S&P Pharmaceutical fell 9.1 percent.
HK STEADY AT 5-MONTH HIGH
In Hong Kong, large-cap local property developers advanced, led by Li Ka-shing-controlled Cheung Kong Holdings Ltd, underpinning the broader market with property prices holding up despite transaction volumes remaining low.
Cheung Kong rose 1.6 percent. Sun Hung Kai Properties Ltd rose 1.4 percent, while Henderson Land Development Co Ltd firmed 1.5 percent.
"With low transaction volumes and seemingly flat prices, the government's attention appears to have shifted from curbing prices to supplying housing for the struggling lower-middle class," said analysts at Samsung Securities in a note.
Analysts at Samsung remain positive on the sector and expect primary market sales to pick up in late September with new launches from Cheung Kong and Sun Hung Kai.
Shares of BYD Co rose 5.7 percent and are up more than 17 percent since last Thursday's, the biggest two-day gain in 16 months.
Morgan Stanley raised its rating on the stock to "overweight" from "equal-weight" citing compelling valuations and potential upside from the company's renewable energy business.
Tsingtao Brewery extended its gains, rising 0.5 percent to an all-time high of HK$46.2, ahead of the Mid-Autumn Festival holidays in China.
China will see two major national holidays in the next three weeks, during which the market will be open for only a combined seven trading days, with two weeks having either one or two days. (Editing by Tomasz Janowski)