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Hong Kong & China Gas Net Beats Estimates on Mainland Sales

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March 15 (Bloomberg) -- Hong Kong & China Gas Co., the piped-fuel supplier controlled by billionaire Lee Shau-kee, posted a 5.9 percent gain in profit last year, beating estimates, as earnings from its mainland business rose.

Net income increased to HK$5.6 billion ($718 million), or 77.8 Hong Kong cents a share, from HK$5.3 billion, or 73 Hong Kong cents a share, the previous year, the company said in a statement to the Hong Kong stock exchange today. That compares with a mean estimate of HK$4.9 billion in a Bloomberg survey of eight analysts.

The fuel supplier, Hong Kong’s first public utility founded in 1862, has invested in property and gas and water projects in China to counter slowing fuel sales in the city. Net income at its mainland unit Towngas China Co. increased 64 percent to HK$435.8 million, according to a statement released yesterday.

“The mainland economy maintained strong momentum in 2010, benefiting the group’s city-gas and natural-gas businesses,” Hong Kong & China Gas said in today’s statement.

Revenue at Towngas China increased 47 percent in 2010 to HK$3 billion, according to yesterday’s earnings statement.

Hong Kong & China Gas shares rose 3.3 percent in Hong Kong trading in the past 12 months compared with a 7.6 percent gain in the benchmark Hang Seng index. The stock fell 2.4 percent to HK$17.56 today, ahead of the earnings announcement.

The shares are rated a “hold” by eight out of 15 analysts surveyed by Bloomberg, while one rates the stock a “buy.” Six recommend selling.

Net income may reach HK$5.3 billion this year, according to a mean estimate of eight analysts surveyed by Bloomberg.

To contact the reporter on this story: John Duce in Hong Kong at Jduce1@bloomberg.net; Wang Ying in Beijing at ywang30@bloomberg.net

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net.

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