CNT GROUP - formerly China Paint Holdings - is holding to its belief in being a jack of all trades, despite suggestions from some industry watchers that it should cut down the scope of its operations. ''We aim at diversification in our enterprise, although China Paint was purely an industrial stock when it listed,'' said chairman Tsui Tsin-tong. The company, a shareholder in the controversial New China Hongkong Group, runs Citybus and is involved in paints and property investment. Its bus operation has been criticised for its losses, which stood at about $10 million last year. ''Public utilities are usually long-term investments with long return periods. But a company needs to have a balance between short-term high-risk and long-term high-risk investments, after all,'' he said. ''And a public utilities operation helps to build an image for the entire group.'' Citybus had started to make a profit two months ago, he said. Citybus will take over 26 franchised routes from China Motor Bus on Hongkong Island for three years from September - a project Mr Tsui expects to generate good returns. It also runs buses from Hongkong to Shenzhen Airport and to Dongguan. Mr Tsui said he hoped services to Huizhou and Guangzhou could be running by the end of the year. The extension of Citybus on to the mainland is one facet of the group's move to step up its China investments. About 30 per cent of the group's turnover is generated from the mainland, while Hongkong contributes most of the rest. But Mr Tsui predicted that in three years' time, China and Hongkong would take equal weighting in CNT's turnover. As the chairman's contacts in China extend even to supreme leader Deng Xiaoping, the group can be expected to find doing business in China easier than do other companies. Analysts say that CNT's holding a stake in New China Hongkong will benefit both companies. But Mr Tsui will not reveal CNT's investment or equity in New China Hongkong. The two groups chaired by Mr Tsui have been the subject of similar criticism. The proposal to involve Beijing's Hongkong and Macau Affairs Office in New China Hongkong was criticised because of the potential for favouritism when the group did business in China. And in January, attention was drawn to the fact that Housing Authority chairman Sir David Akers-Jones and member Norman Leung Nai-pang were CNT vice-chairman and director respectively. There was speculation that the paint maker had taken advantage of this to secure paint supply contracts to public housing flats. An annoyed Mr Tsui described the criticism as ''superfluous''. ''The Housing Authority's tendering is decided by a committee, not just any member,'' he said. ''And the authority doesn't use a lot of paints anyway. We're not its largest supplier because our paints are expensive. ''They're more ready to use products from small companies. In fact, we're its smallest supplier.'' Mr Tsui followed that with the sort of argument he had used less than two weeks before to rebut criticisms of New China Hongkong: ''Many people working in the private sector hold offices in the public sector. Can you say they're all thieves?'' Returning to business, he listed five of the company's investments that he predicted would be the most profitable: paint and can plants in Shajing; a paint plant in Wuhan; a commercial building in Chengdu; and a commercial complex and a five-star hotel in Dalian. Production at CNT's plant at Shajing, Shenzhen, is expected to start by July, freeing its 40,000-square foot Hongkong plant site for redevelopment. The Shajing factory is about 10 times larger than the Hongkong one and will quadruple capacity. It is entitled to sell 30 per cent of its output in the domestic market. South China Brokerage analyst B.S. Seow said: ''Although costs will be lower, we expect some start-up costs in the initial period and anticipate improvement in profit margins in 1994.'' CNT's joint venture paint factory in Wuhan is also expected to start production by July. ''It will supply paints for Hubei and Sichuan, and for steel plants involved in the Three Gorges Dam project,'' said Mr Tsui. The group is to take 50 per cent of the Chengdu commercial project, which is estimated to represent a total investment of 300 million yuan (about HK$407 million at official rates). Last December, the group acquired a 60 per cent interest in a 400,000-sq ft site in Dalian for the development of three, 28-storey apartment blocks with a commercial podium and a 15-storey, five-star hotel. The project is a joint venture between CNT and city government corporation Da Qing City. However, Mr Tsui said he could not estimate the profits these projects might generate at this early stage. CNT reported an 84.5 per cent profit leap before extraordinary items to $90.5 million for last year. Earnings surged 87 per cent to $90.5 million but earnings per share declined 30 per cent to 10.3 cents. This was in line with market expectations, said Ms Seow. The earnings increase was due to the first contribution from its bus service and property divisions, acquired last March. Earnings dilution was significant, as the issued share capital had tripled with the issue of shares to finance the acquisitions, said Ms Seow. The sale of 228 Queen's Road East, had brought extraordinary gains of $45 million before expenses. ''We estimate the contributions from the acquisitions to exceed those of its original business of paint manufacturing,'' said Ms Seow. There was a decline in its share of profit from associates, which include paint and container manufacturers in China. A final dividend of 2.8 cents per share has been recommended. ''We estimate the group's net debt, most of which is attributable to Citybus, to be about $160 million or 16 per cent of estimated shareholders' funds,'' said Ms Seow. ''This is not high, but its cash inflow is not strong in the short term relative to the group's ambitions in investments and acquisitions.'' The brokerage forecasts a rise in CNT's attributable profit this year of 20 per cent to $126 million, on a turnover that will grow 39 per cent to $1.07 billion. For 1994, attributable profit is forecast to be $181 million, up 44 per cent. The brokerage expects turnover to rise 29 per cent to $1.38 billion. But the forecasts exclude contributions from recent investments, including the 2.4 million-sq ft development in Dalian and its stake in New China Hongkong. The group is in joint venture developments of port and storage facilities in Liaoning and Shenyang. It has sales offices for paints in Shenzhen, Chengdu and Beijing, with a view to extending the chain to other strategically located cities. Mr Tsui said the group's plan to participate in a Shenzhen railway had been put on hold. ''At first, the Shenzhen government proposed a light rail project. Now they're considering whether to change it to a mass transit railway project, which entails a much higher investment than the budget we planned. We have to wait and see their proposal before deciding whether to join,'' he said. ''We also doubt the passenger volume [will be enough for] a mass transit railway.'' But he said that the group was very likely to participate should it remain as a light rail project. It has withdrawn from previous interests in Rediffusion's cable network. ''It is a big investment. As we're not specialised in this field we think we'd better get out,'' said Mr Tsui.