Beijing Enterprises, the capital's listed flagship conglomerate whose main business is gas distribution, reported that net profit rose 10 per cent in the first half to HK$1.82 billion year on year.

Shares of the company edged up 1.33 per cent yesterday to HK$49.55, outpacing the benchmark Hang Seng Index, which dropped 1.2 per cent.

"In the second half, we will accelerate pipeline network construction, improve network coverage and explore markets outside Beijing," vice-chairman and chief executive Zhang Honghai said.

The Beijing-based company has extended its natural gas business to nearby provinces including Shandong, Liaoning and Hebei. It said it would deploy more resources to develop the suburban markets surrounding the capital.

First-half revenue rose 16 per cent to HK$18.15 billion, of which revenue from the natural gas distribution business in Beijing gained 21.4 per cent compared with a year earlier to HK$10.3 billion, supported by an increase in heating subscribers and a three-day extension in heating supply.

The firm's brewery unit, Beijing Yanjing Brewery, posted revenue of HK$7.66 billion, up 13.5 per cent year on year, mainly due to higher average selling prices.

Brewery chairman Li Fucheng said annual beer production was expected to reach 8 million kilolitres by 2015, by which time Yanjing would be among the world's top five breweries.

Beijing Enterprises has built new plants in Guizhou and Xinjiang since the second half of last year and has run technological upgrades and expansion projects in central and western regions.