Red chip Beijing Enterprises Holdings this year is expected to see a continued decline in profit margins of its beer division and a sales fall at its information and technology investment, Beijing International Switching System. Analysts said the slow growth would be helped by exceptional earnings through the coming spin-off of its mainland subsidiary, Sanyuan Food, in China's A-share market. The China depositary receipts issue, which could enhance its net asset value, would be more positive news for the group, analysts said. Its 54 per cent owned Yanjing Brewery said recently its sales last year surged 31 per cent to 1.95 billion yuan (about HK$1.82 billion). But net profit grew only 9 per cent to 286 million yuan as net margin declined from 17.5 per cent in 2000 to 14.5 per cent last year with the recently acquired brewery plants in Shandong. DBS Vickers Securities said Yanjing would continue acquiring brewery plants this year and overall profit margin would continue to erode. One factor clouding prospects was Beijing International's growth margin. A fall in earnings was seen as sales were expected to drop 30 per cent this year due to less demand from China Telecom, a DBS report said.