H-share Tsingtao Brewery posted a 30.74 per cent gain in net profit to 83.51 million yuan (about HK$78.25 million) last year - 51.02 per cent less than forecast. China's largest brewery originally predicted its profit for last year would be 170.52 million yuan after a rapid expansion through acquisitions that began about three years ago. The company issued a profit warning in February, saying net profit last year could be 80 per cent less than its original forecast. Secretary to the board Yuan Lu said some acquired breweries failed to meet profit targets. Ms Yuan attributed the smaller than expected gain to declining demand in the second half of last year and the introduction of an alcohol sales tax. She said the company paid 10 million yuan more in tax last year. 'Sales by our breweries in Beijing and Shanghai was affected by shrinking tourism there as a result of the September 11 terrorist attacks on the United States,' Ms Yuan said. Turnover rose 37 per cent to 4.72 billion yuan. Earnings per share were 8.5 fen, 20 per cent higher than a year ago. A dividend of 11 fen will be paid. Its domestic market share climbed three percentage points to 11 per cent. Tsingtao Brewery operates 46 breweries with a combined annual production capacity of 3.8 million tonnes. Analysts questioned the rapid expansion-through-acquisition strategy, which was adopted at the expense of profit growth. Chairman Li Guirong said the H share would slow its expansion pace and focus on consolidating existing operations. However, Mr Li said the company would seek acquisitions in promising markets.