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Listed companies make juicy profits from bullish stock market

(Xinhua)
Updated: 2007-03-09 11:20

A total of 206 out of the more than 1,400 Chinese listed companies reported a close to 90 percent rise in profits in 2006, according to their annual reports.

The 206 companies, listed on the Shanghai and Shenzhen stock exchanges, registered combined business income of 372 billion yuan (US$46.5 billion) last year, a year-on-year rise of 25 percent. Their net profits totaled 23.51 billion yuan, up 89 percent.

Seventy-two listed companies reported net profits of over 100 million yuan last year, and 59 listed companies saw their profit rise by 100 percent year-on-year.

Enterprises in the retail, wholesale, pharmaceutical, bio-technology and manufacturing sectors reported the biggest rise in profits. Firms with net profits of more than 100 million yuan were in the non-ferrous metals, fertilizer, real estate, machinery and equipment sectors.

After a four-year recession, China's mainland stock markets rallied at the beginning of 2006, with the benchmark Shanghai Composite Index continuously hitting new highs.

On February 27, Chinese stocks suffered their biggest single-day fall in a decade, plunging 8.8 percent.

However, a new report from US investment bank Goldman Sachs takes a confident stance about the long-term prospects of China's stock market.

Goldman Sachs updated an earlier prediction to claim that the H share index would hit 12,000 points at the end of 2007 and argued that Chinese stocks would resume their upward movement in the second half of this year.

China's economy is ticking over well and the fundamentals of Chinese companies are strong, economists from Goldman Sachs believe.

Further potential for renminbi appreciation is also having a positive effect on business, the report said.