GUANGDONG Investment and China Travel International, reported to be vulnerable to the fall in the yuan, say they have adequate measures to protect their earnings against the currency risk. After their respective annual general meetings yesterday, officials from the two red chips said that while part of their business might be affected, the overall impact of the yuan fall had been kept to a minimum. Guangdong Investment director Zhang Yonglin said the company had formulated a number of strategies since the value of the currency started to fall. They included selecting investment items with a higher potential profit margin. ''Since last year, Guangdong Investment has been trying to re-invest its yuan reserve generated from its mainland enterprises into other business in China,'' Mr Zhang said. The company has also been using its Hongkong dollars as a mortgage for yuan lending at a fixed exchange rate. The lenders are usually mainland entities which need foreign currency for investment. This kind of lending, which involves no interest, was beneficial to both parties, Mr Zhang said. He said the group's tourism and property investments in China were the least hit as more than 80 per cent of their income was Hongkong dollar denominated. ''With 90 per cent of the construction cost in yuan, the yuan fall may even lead to certain currency gains on the books,'' he said. However, Mr Zhang admitted that industrial investment was the largest problem as 80 per cent of its income was in yuan. ''In this regard, the company can aim only at greater foreign currency earnings and this is exactly what it is doing with the malting and brewery business,'' he said. Meanwhile, China Travel International chairman Ma Chi-man believes the yuan fall will not have a significant adverse effect on profits. Apart from using its yuan earnings for other mainland investments, the company will also consider whether any future assets injected from its parent will provide sufficient foreign currency earnings. Mr Ma said China Travel Holdings, the mainland parent, was now planning to put more assets into the company by the end of the year. With some 60 per cent of its profits coming from its leisure park operations in Shenzhen, there had been concerns that the yuan fall would substantially cut into profits. Mr Ma said the impact should not be so significant as the costs related to this leisure park operations were also largely in yuan. China Travel International is considering raising the leisure parks' admission fees. However, Mr Ma said the move was driven by inflation in China rather than the need to compensate for the yuan's fall.