An expanded income base and reduced finance costs were the recipe for a 217 per cent rise in first-half profit for China Travel International Investment (CTII). The red chip's first-half bottom line was HK$380.29 million, against HK$120.07 million a year earlier. The profit growth was also helped by a gain of HK$53.04 million from the disposal of its 40 per cent interest in China Travel Roads & Bridges. Investors responded to the gain yesterday by pushing the stock's share price up 9.77 per cent, to a HK$1.46 close. Executive director Michael Ng Chi-man attributed the gain to the additional income brought in by China Travel Service (Hong Kong) and the refinancing of syndicated loans at a significantly lower rate. In March its parent, China Travel Service (Holdings) Hong Kong, sold the red chip its interest in SAR-based travel agency China Travel Service (Hong Kong) and Hotel Grandeur Macau as well as a 62 per cent stake in online ticketing operator China Travel Net. The deal was part of an exercise by CTII to re-focus on its core business. The assets joined CTII's other hotels, three theme parks in Shenzhen and its passenger transport arm. Part of the sale agreement was a guarantee the acquired assets would yield a net profit of HK$187 million this year and next. The fall in interest rates in the first half reduced CTII's finance costs to HK$36.96 million from HK$88.83 million previously. Earnings per share on a diluted basis were 10.27 HK cents, up 186 per cent from 3.59 HK cents previously. Directors will pay an interim dividend of five HK cents. Analysts said the lower comparison base in the first half last year also contributed to the surge. Last year saw net profit fall 35.56 per cent in the first half, to HK$120.07 million, from HK$186.32 million in the first six months of 1999. The re-classification of the earnings from CTII's 51 per cent-owned Shaanxi Weihe Power Plant, as share of profit of jointly-controlled entities, served to reduce the turnover and operating profit. The company reclassified the earnings because the power plant investment was not regarded as part of the core business. Last year, its stake in the power plant operator contributed 60 per cent of CTII's operating profit. But, as part of its concentration on core activities CTII wants to sell its stake in the plant. CTII's turnover fell 29.28 per cent, on a year on year basis, to HK$993.76 million - against HK$1.4 billion previously. Operating profit slid 22.56 per cent, to HK$330.23 million. The company is trying to expand into China's travel market to fill the earnings' void that will be left by the sale of its power plant stake. Last month, the company confirmed that it had applied to Beijing for a wholly-owned mainland travel agency licence. The move aims to capture the opportunities offered by China's successful bid to host the 2008 Olympic Games and its impending accession to the World Trade Organisation.