Citic Pacific says it will plough up to HK$10 billion into projects in China and Hong Kong this year, underlining its shift from an investment holding company to a property and infrastructure conglomerate. As the listed arm of Beijing's semi-official investment company, China International Trust & Investment Corp, Citic Pacific plans to take advantage of HK$5 billion in cash reserves and its strong financial position to buy stakes in more infrastructure projects in Shanghai and Jiangsu province. The group yesterday unveiled a 19.5 per cent rise in attributable profit for last year to HK$3.07 billion, up from HK$2.57 billion in 1994. Despite the rise, the share fell 45 cents to HK$29.20, with 7.09 million shares changing hands. 'They [the results] were in line with market expectations,' John Hetherington of Asia Equity said. Earnings per share rose 15.2 per cent to HK$1.526 from HK$1.324. A final dividend of 40.5 cents a share was recommended, taking the year's total to 55 cents - 14.5 per cent more than the previous year. Chairman Larry Yung Chi-kin said more than HK$2 billion in infrastructure projects were under negotiation. Last week Citic Pacific agreed to pay US$200 million for a 45 per cent stake in the completed Xu Pu Bridge in Shanghai. The bridge will provide a 15 per cent internal rate of return, with contributions expected later this year. Deputy managing director Peter Lee Chung-hing, said about HK$5.5 billion of the HK$10 billion would go towards infrastructure, about HK$3.5 billion property and about HK$1 billion industrial projects. Managing director Henry Fan Hung-ling said the company's financial position was comfortable and there would be no need for cash calls. The group issued 120 million new shares in January and its net debt is 6 per cent of the market asset value. 'We can undertake a HK$20 billion project anytime,' Mr Fan said. Hong Kong's weak retail sector and tight credit in China triggered a 39 per cent drop in car sales in the territory and a 57 per cent sales drop on the mainland for subsidiary Dah Chong Hong, dragging down the group's turnover by 10.6 per cent to HK$10.83 billion from HK$12.12 billion. That fall was more than offset by a leap in profits from infrastructure. Civil infrastructure - bridges, tunnels and power stations - accounted for 16 per cent of the group's profits, compared with 5 per cent in 1994. Profits at 46 per cent-owned Hong Kong Dragon Airlines (Dragonair) rose 22 per cent to about HK$722 million, even though it has not been able to secure new routes for more than two years. Mr Yung said he hoped the airline could begin services to Kaohsiung in Taiwan this year, but he would not predict when that would happen. He said Dragonair would not rush to seek a separate listing because it had no major capital requirements. Property earnings fell slightly as a proportion of total earnings to 21 per cent from 24 per cent, and could fall further this year due to a smaller sales volume of new flats. But big projects are in the works. Citic Pacific and Citic Hong Kong spent HK$3.35 billion for a site next to the Tamar Basin in Central in August last year for its headquarters, which is expected to be completed in early 1998. Citic Pacific also has sold all 319 units in Phase 8 and 190 units in Phase 4A at Discovery Bay, while negotiations with the Government to expand Discover Bay and build a road to the new airport are well advanced. In May the company would sell a residential project in Kwai Chung, which would generate more than $1 billion in sales income, Mr Fan said. Earnings from its 10 per cent stake in Hongkong Telecom remained stable at 28 per cent of total profits.