Directors expect to approve the payment of three interim dividends of 26 cents a share during this financial year.

According to the Estimate Directory, analysts were on average looking for earnings of $2.18 a share, with a narrow forecast range of $2.12 to $2.24. For the current year, they expect earnings to climb to $2.54 a share.

During the year, sales to the commercial and domestic sectors climbed 8.2 per cent and 12.8 per cent respectively while sales to industry dropped five per cent as manufacturing plants moved to China.

''This is an accurate reflection of the evolving economy in Hong Kong - from labour and energy intensive manufacturing to high-tech processes, and continuing growth in the commercial, service and finance sectors,'' managing director Ross Sayers said.

Sales to China climbed 32 per cent, compared with 101 per cent in the previous year. This was attributed to Guangdong's higher reliance on hydro-electric power during the wet summer months and a slowdown in demand caused by China's economic austerity programme.

Total unit sales climbed 10.3 per cent to 25.5 billion kilowatt hours. However, the company said the rate of increase would decline in this financial year because of an expected decline in sales to China.

In a research report issued yesterday, Lehman Brothers said it was maintaining its buy recommendation because of China Light's attractive long-term fundamentals and high quality earnings.

It said the surprise bonus share announcement could boost its stock price if, as expected, retail investors responded positively.

China Light has been a favourite of investors, particularly since Salomon Brothers issued a positive research report earlier this year saying that the stock was significantly undervalued.

The enthusiasm among foreign investors for blue chips helped China Light's share price hit an all-time high of $54.50 during the recent bull run.

However, the stock has dropped $5, 9.1 per cent, over the past week as the market went through a sharp correction.

Salomon's recommendation was largely based on China Light's plans for China, which requires heavy investment in the power sector to keep up with rapidly-growing domestic demand.

China's Power Ministry aims to boost production by 72 per cent to 310 million kilowatt hours by the year 2000, which would require about US$25 billion in investment.

China Light said it had taken an important step in exploring investment opportunities in the mainland's energy sector by establishing China Energy Investment Co.

Last month, China Light and Electricite de France, which is owned by the French Government, announced they were close to signing a power-generation deal in Shandong province with an initial investment of about US$2.5 billion.

If the deal goes ahead, the two firms would form a joint venture with the Shandong power authority that would give them a guarantee rate of return on energy investments.

The company said negotiations were in progress for a number of power station projects in China. These included the proposed long-term co-operation with the Shandong electricity authorities. A feasibility study is now taking place.