Just a day after China's largest beer maker Tsingtao Brewery announced it was forming an alliance with the world number one Anheuser-Busch, came the news that the Chinese beermaker is predicting a leap in first half net profit of more than 50%.

The news of the financial results and the A-B tie-up, which may include an increase of A-B's stake in the company drove Tsingtao's shareprice up 13.3% in morning trade on the Stock Exchange of Hong Kong.

Tsingtao shares gained 42.5 cents to close at $3.625 in morning trade. The benchmark Hang Seng index closed up 22.74 points to 10,177.99.

A-B and Tsingtao are in discussions about how best to increase A-B's holding, though it is thought that a private share placement and additional share offer among the methods discussed.

Tsingtao would not comment on a report in Hong Kong's Apple Daily on Wednesday that Anheuser-Busch intends to boost its interest to 25 percent, a move that would cost an estimated HK$1.1 billion (US$141 million).

However it is understood that the Chinese government will remain the largest shareholder in the brewer, no matter what the outcome.

Sales of Tsingtao-brand beer rose about 40% year-on-year during the first half of 2002, the company said. Operational efficiencies arising from the internal consolidation of its subsidiaries also contributed to the rise in profits, it added.

The results have not been finalised and will be released before end-August, the company said.