Despite revenues jumping 24 percent in 2006, China Travel International (0308), the Hong Kong-listed arm of the state-owned mainland travel service, reported net profit slumped 39 percent to HK$375 million from HK$612.6 million the previous year.

Earnings per share were 6.86 HK cents, down from 12.59 HK cents.

The drop in net profit was partly due to heavy investment in two new business ventures, Zhuhai Ocean Spring Resort and online travel consolidator Mangocity.com, the company said Friday in a statement to the Hong Kong stock exchange.

Even though the two new businesses launched last year generated a combined HK$568 million in revenue, they did not contribute any profit because of high startup and marketing costs.

Overall, 2006 turnover rose to HK$6.98 billion from HK$5.64 billion a year earlier. Net income was also affected by the absence of a one-off gain such as the HK$99 million booked in 2005 from convertible bonds.

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