Blue-chip utility Hong Kong and China Gas (Towngas) has reported attributable profits for the six months to June 30 of $979.1 million, up 20 per cent on the $815.4 million for the same period last year. The result was at the high end of analysts' expectations of 16 per cent growth for the period, according to figures in the Estimates Directory. Earnings per share were 33 cents, an 18 per cent increase on last year's figure of 27 cents, while turnover rose by a modest 12 per cent from $2.22 billion to $2.29 billion. An interim dividend of 12 cents has been recommended. Towngas shares dropped 30 cents yesterday from a high of $12.95 to $12.65 before picking up in late trading to close at $12.80, down 5 cents on the day. 'As far as utilities go, HKG is the best off. It is unregulated and its market is still growing. However, this is already reflected in the price,' said Paul Deayton, utilities analyst at Lehman Brothers. He said Towngas is trading at approximately 20 times 1996 earnings compared to Hong Kong Electric on a multiple of 11 times and China Light on about 13 times prospective earnings. 'That is expensive. It has generated good growth but it appears there could be some attraction in the electric companies,' Mr Deayton said. Another analyst said fellow utilities were oversold and could be expected to pick up in the second half of the year. He said Towngas' relatively high multiple reflected the company's interests in property development and added once these were taken into account its prospective 1997 multiple dropped to a more reasonable 14 times earnings. Towngas has two main property investments including a 45 per cent stake in the King's Park Rise luxury residential facility due to be completed in mid-1998, and a 15 per cent interest in the MTR Hong Kong station project. Analysts said investors could expect a steady second half with full year growth of approximately 20 per cent. Towngas chairman, Lee Shau Kee was similarly downbeat about the company's year-end prospects saying he expected the rest of the year to be 'satisfactory'. Mr Lee said plans to provide Lantau Island with piped gas were progressing and anticipated supplies to be available by March next year. The pipeline has cost $500 million and will also supply gas to Chek Lap Kok Airport.