Red chip China Everbright has announced a record net profit of HK$433 million in the year to December 31, partly helped by disposal of shares in China Telecom (Hong Kong). The profit figure is the biggest in the company's listed history and exceeded market expectations. In 1998, it posted a net loss of HK$389.48 million. The improvement came after the company, controlled by mainland conglomerate China Everbright Holdings, underwent painful restructuring as it focused on expanding its financial services in securities, banking, insurance and asset management. General manager and executive director Shao Zhengkang said yesterday that he expected performance to improve this year on the back of the sharp increase in turnover on the Hong Kong and mainland stock markets. It also intends to sell more China Telecom shares. Turnover for last year was HK$139.84 million, up from HK$27.25 million. Earnings per share was 31.90 HK cents, against a loss of 31.86 HK cents in 1998. The dividend for the year is 10 HK cents. No dividend was issued in 1998. Of last year's profit, about 51 per cent was derived from operating activities - including contributions from its main associated companies - while 49 per cent came from the disposal of China Telecom shares. The company owns a 49 per cent stake in Everbright Securities, one of the mainland's largest brokerages, a 20 per cent holding in China Everbright Bank, and 20 per cent of Hong Kong-listed International Bank of Asia. In the first two months of the year, the company sold a further 10 million China Telecom shares, leaving it with 62 million shares worth about HK$4.6 billion based on China Telecom's closing price of HK$74.75 yesterday. Mr Shao said the company had HK$4.65 billion in net assets and HK$740 million cash in hand. Executive director and acting president of Everbright Securities Nie Qingping said the brokerage's performance would improve this year. Everbright Securities made a pretax profit of 278 million yuan (about HK$259.9 million) last year, sharply lower than the 460 million yuan the previous year. In the first three months, the brokerage handled stock transaction volume of 63 billion yuan, or almost half of last year's combined transactions. 'The mainland's stock markets have come back to life since the beginning of this year and we expect the trend to continue,' Mr Nie said. He said the brokerage was expected to test on-line stock trading in Shanghai in the next two months. Meanwhile, China Everbright Bank is looking at setting up on-line banking operations and will work towards a listing on the domestic stock market.