Cathay earnings top expectations

Cathay Pacific has been extending its routes on mainland China

Hong Kong airline Cathay Pacific has posted better-than-forecast earnings for the first six months of the year as it taps into China's growing market.

Net profits hit 2.58bn Hong Kong dollars ($330m; £162.7m) for the six months to June, up from HK$2.4bn in the same period a year earlier.

Analysts expect strong growth ahead, helped by its acquisition of Dragonair and extended routes in mainland China.

Cathay shares hit HK$22.2 on the news, marking a new record for the airline.

Paul Dewberry, a Merrill Lynch analyst, raised his price target for the stock by 5.3% to HK$24.50, on the grounds that the airline is increasing its strength in China - one of Asia's fastest-growing markets.

The acquisition of Dragonair increased the number of Cathay's destinations in China from two to 25.

The earnings results come after Cathay announced plans to buy another five Boeing aircraft, in a bid to increase its network.