CITIC Pacific posted its first annual loss in almost two decades after wrong-way bets on the Australian dollar forced it to seek a bailout from China.

et loss was $HK12.7 billion ($2.35 billion), or $HK5.68 a share, for 2008, compared with a profit of $HK10.8 billion, or $HK4.90, a year earlier, the Hong Kong-listed company said yesterday.

That compares with the $HK11.2 billion loss median estimate of five analysts surveyed by Bloomberg.

Sales rose 21 per cent to $HK46.4 billion.

Citic Pacific plunged 81 per cent in 2008, making it the second-worst performing stock on Hong Kong's benchmark index after losses on Australian dollar bets forced it to seek $US1.5 billion ($2.15 billion) of aid from state-owned parent Citic Group.

Citic Pacific said it had a $HK14.6 billion realised and marked-to-market loss after tax on foreign exchange contracts.

"What really matters now is the company's guidance on its underlying businesses, as most of them -- such as aviation and steel production -- are quite cyclical," Billy Ng, a Hong Kong-based analyst at JPMorgan Chase, said before the earnings statement.

"The exchange loss is no surprise and is reflected in the share price."

Citic Pacific, which also develops property, faces dwindling demand because of the global recession. The stock has gained 14.6 per cent this year, compared with the 3.8 per cent drop in the Hang Seng index.

Cathay Pacific, Hong Kong's biggest carrier, which is 17.5 per cent owned by Citic Pacific, on March 11 reported an annual loss of $HK8.56 billion after making wrong bets on fuel prices and as the global recession crimped travel.

Citic Pacific bought currency contracts to fund a $1.6 billion iron ore mine in Australia. The company had expected the Australian dollar would rise, and incurred losses after the currency tumbled against its US counterpart.

Citic Pacific's chairman Larry Yung and managing director Henry Fan were among 17 directors being probed by the Securities and Futures Commission, the company said on January 2. The commission did not say what the probe was about.

The board has been criticised for a six-week delay in revealing the losses by lawmakers and shareholder activist David Webb.

"Investors will need some time to rebuild their confidence in the company," said JPMorgan's Mr Ng, who recommends that investors "underweight" Citic Pacific shares.

According to Citic Pacific's website, the company was listed in 1991 after it bought a 49 per cent stake in Tylfull Company and changed names.