March 13 (Bloomberg) -- China Resources Gas Group Ltd., the Hong Kong-listed fuel distributor expanding on the mainland, plans to more than double spending on acquisitions after reporting a 64 percent increase in full-year profit.
The operator of 73 city gas projects in 16 provinces plans to spend HK$6 billion ($773 million) to HK$8 billion on purchases this year, Managing Director Wang Chuandong said at a press conference today in Hong Kong. The company spent about HK$3 billion to buy 25 city gas projects in 2011, Wang said.
China Resources Gas is expanding its mainland distribution business as demand for the cleaner-burning fuel surges. China, the world’s fastest-growing major economy, wants gas to account for 10 percent of its energy consumption by 2020 to cut the use of more polluting oil and coal.
“Mergers and acquisition have been normal in the city gas sector in the past few years and I think the trend will continue,” said Wang. China Resources Gas will continue to expand through both organic growth and acquisitions, he said.
The company posted net income of HK$1.2 billion in the year ended Dec. 31, while sales rose 62 percent to HK13.5 billion.
Shares of China Resources Gas fell 2.5 percent, the most since Dec. 1, to HK$13.48 before the results were announced. The benchmark Hang Seng Index gained 1 percent.
ENN Energy Holdings Ltd. and China Petroleum and Chemical Corp. proposed to take over China Gas Holdings Ltd. with a joint bid of HK$15.3 billion in December. China Gas, which distributes gas in 20 provinces, rejected the offer on Dec. 14.
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