CITIC Pacific gained a useful strategic asset at a reasonable price in its acquisition of half of the Discovery Bay residential complex. The $3.4 billion acquisition could contribute more than $1 billion in income over the next two years, boosting earnings per share by between five and 10 cents over the period. The mainland investment holding company, under the Communist Party's State Council in Beijing, is earning itself a credible reputation as an astute investor and enhancer of strategic assets. Since its name change in the summer of 1991, CITIC has been aggressively expanding its investment portfolio with significant holdings in economically important assets in Hong Kong and China. Analysts have been happy to report that despite huge changes and big cash calls - it undertook the stock market's biggest placement last year to raise $7 billion - shareholders have been treated fairly. ''CITIC has enhanced earnings per share and asset value per share in the expansion of the group,'' one analyst said. The only criticism of the company is its lack of a hands-on approach to business. As an investment holding company, investors have been reluctant to pay a premium for its shares, as these types of vehicles generally trade at a discount. According to Bloomberg data on the share price of the group since May 1990, CITIC Pacific has outperformed the Hang Seng Index by 165.36 per cent. The price appreciation over this period has been 402 per cent, against the Hang Seng's 283 per cent. Total return including dividend income on the period was 448.5 per cent, providing for an annualised return of 55.7 per cent, against 41.8 per cent achieved by the index. Formerly known as Tylfull, which listed in 1986, the company was acquired by CITIC Hong Kong as a back-door listing, into which 38.3 per cent of Dragonair was injected in 1990. This was increased to 42 per cent in 1992. Concurrently, CITIC Hong Kong bought 51.4 per cent of Tylfull from Chao Kuang Piu. In 1991, the parent injected 12.5 per cent of Cathay Pacific into CITIC Pacific, and Robert Kuok Hock Nien and Li Ka-shing were numbered among the group's minority shareholders. In the summer of 1992, the group acquired private trading company Hang Chong Investment, and added value by giving the vehicle repair and dealer arm, Dah Chong Hong, a road into China. A 12 per cent holding in Hongkong Telecom was injected in January last year. CITIC Pacific has a 10 per cent stake in the Western Harbour Tunnel group, with the franchise to construct and run the Western Harbour project. It has also announced strategic deals in power-station projects in China. The market consensus figure for the group's profit last year, according to The Estimate Directory, is $1.87 billion, up 80 per cent on 1992, with earnings per share at $1.07, up 23 per cent. This year, analysts expect net profit of $2.35 billion, up 26 per cent on 1993, with earnings per share at $1.28. An early Jardine Fleming estimate of earnings per share on completion of the HKR deal might place it at $1.32 this year and $1.57 in 1995. Speculation over fund-raising to reduce debt has led some analysts to believe Hang Chong, or the vehicle arm Dah Chong Hong, might be listed through a 25 per cent flotation of old shares to raise some $2.2 billion. This could form a package of transactions to raise a total of about $4 billion to repay debts and make further small but strategic investments.