Shares of Citic Pacific surged in Hong Kong after its full-year earnings surprised the market on the upside. As of 2:15pm HK time, the stock was up 10.3 per cent to HK$12.22 after ending the morning session at HK$11.62. The company said during the midday break that annual earnings fell 25 per cent in the year to December. The fall was not quite as bad as some analysts had expected. Bank of America Merill Lynch had forecast that the company’s 2012 net profit would be down by 26 per cent, and Morgan Stanley had predicted a profit drop of as much as 31 per cent. Citic Pacific said in a statement that profit from continuing business operations was significantly lower in the year to December, mainly due to a sharp decline in the contribution from a speciality steel business in the second half. It said its China property business generated less profit last year, compared to the previous corresponding period. “In addition to slowing property sales, the decline in profit was also due to adjusting the pace of our development to match the current market conditions,” Citic Pacific said. “The hard truth is that both steel and property in mainland China were affected by the macroeconomic environment.” However, it said other business sectors, such as energy, Hong Kong property and tunnels, and its Dah Chong Hong and telecom units performed “satisfactorily”. As of December 31 last year, the company said it was cashed up, with HK$48 billion in cash and available committed facilities, giving it the flexibility “to execute our investment plans and pay a dividend to our shareholders”. The company said its revenue last year was HK$93.27 billion, down from HK$96.89 billion in 2011.