STEADY sales growth at Hong Kong and China Gas Co lifted earnings 19.6 per cent last year, in line with expectations. The territory's dominant gas supplier announced yesterday that its net profit for the year ending December 31 hit $1.63 billion, compared with $1.36 billion for 1994. Hong Kong and China Gas, which produces and distributes Towngas, saw sales rise 14.3 per cent to $4.25 billion from $3.71 billion. The consensus among the 33 analysts listed in the February Estimate Directory was for net profit growth of 20 per cent. Earnings per share rose 17.9 per cent to 66 cents from 56 cents. Hong Kong and China Gas chairman Lee Shau-kee said: 'In the year ahead, we expect a 7 per cent increase in Towngas sales volume and a gain of about 65,000 net new customers.' The company announced it would pay a final dividend of 23 cents a share, the same as last year, bringing the total dividend payout to 35 cents per share. As a bonus to shareholders, the utility proposed to issue one share for every five shares held and a 1997 warrant for every 10 shares. The warrant, which is at a discount to the company's current share price, will have an initial exercise price of $13.80. Hong Kong and China Gas plans to increase its authorised share capital from $750 million to $1.25 billion by the creation of two billion ordinary shares. Hong Kong and China Gas shares added 10 cents yesterday to close at $15.25, with 11.05 million shares changing hands. Elvic Ng, an analyst at Vickers Ballas, said: 'The bonus issue means the management is confident it can maintain the same dividend.' He expected profit growth of about 17 per cent for the next two years, which could slow to 15 per cent by the year 2000. Another analyst said the company would issue the new warrants to raise cash for property projects in Hong Kong and gas projects in China. The money failed to appear when earlier warrants expired on December 31 last year without being converted. 'Last time they issued warrants at a premium. This time they are going to issue them at a discount to the share price, which is pretty safe,' he said. Mr Lee said the utility invested $755 million in pipelines and facilities to expand its gas supply system in 1995. The number of installed meters rose 6.3 per cent to about 1.1 million. He said the company's $500 million Lantau Link pipeline could supply gas to the new Chek Lap Kok airport and other projects on Lantau Island by December.