The 2008 net profit of 814 listed companies, which account for more than half of the total listed on Shanghai and Shenzhen stock exchanges, dropped 5.96 percent year on year.

Figures released Wednesday by China Securities Journal Information Data Center show the main business income of these companies was up 19 percent to 7.36 trillion yuan (US$1.08 trillion), while the net profit was down 5.96 percent to 660.8 billion yuan.

Analysts said the 2008 net profit of all the 1,625 listed companies would be lower than the previous year, but their first quarter performance might be better than the last quarter of 2008.

Zhang Gang, senior analyst at Southwest Securities, said the first quarter performance was "not good enough" compared with the same period of last year, but was better than the previous quarter.

He attributed the improvement to cost reductions. Since the price of bulk commodities substantially decreased in the second half of last year, the costs of midstream and downstream processing enterprises had generally declined.

Major companies that had posted their annual reports by Wednesday included China National Petroleum Corporation, Sinopec, Industrial and Commercial Bank of China, Bank of China, China Life Insurance and China Unicom. The net profit of these companies represented more than 55 percent of the total of listed companies.

Despite a slight decrease in the interest rate margin, banks had seen a rapid growth in loan, which was also a reason for the improvement, Zhang said.

However, some analysts said further information and observation were required before passing judgment on the first quarter performance of listed companies.

(Xinhua News Agency April 2, 2009)