'We are confident the sales volume will rise to at least 21 billion cubic metres and the number of subscribers to 20 million by 2015,' said CR Gas managing director Wang Chuandong.

This year the company is set to spend HK$6 billion to HK$8 billion to acquire distribution channels, compared with HK$3 billion last year. New investments will include joint ventures in Tianjin, Ningbo and projects due to be acquired from parent China Resources (Holdings).

The company said that in addition to the Tianjin and Ningbo acquisitions, as well as the organic growth of existing projects, it would need to acquire seven billion cubic metres of gas distribution channels by 2015. CR Gas will finance most of the acquisitions through loans and internal resources.

Pilot reforms on natural gas prices in Guangdong and Guangxi last year have yet to affect its profit margin, which stood at 29 per cent last year. Under the pilot scheme, the price of natural gas is pegged to that of other forms of energies. Natural gas prices are linked to production costs, which fail to factor in demand and costs such as transport fees.

'We don't see any reason for Beijing to introduce reforms on gas prices to discourage natural gas usage,' said Wang. 'China needs to meet its target on carbon emission reduction in the long term.'

As of the end of last year, the company operated 73 gas projects in 16 provinces and served 10.5 million residential customers. Some 80 per cent of its sales were from gas distribution while 20 per cent derived from connection fees.

The wholesale profit margin rose to 21.4 per cent last year from 20 per cent in 2010 because of the increase in industrial users.

The company's shares dropped 2.46 per cent to HK$13.48 yesterday.

$1.2b

was last year's net profit, in HK dollars, for China Resources Gas

- The figure is a 64 per cent year-on-year increase

- Sales rose 62pc