Analysts are skeptical on the performance of cyclical industries like petroleum. [CFP]

Most of the listed Chinese firms that have come out with first half earnings numbers have indicated of mixed fortunes for the second half of the year, according to analysts and experts.

In sharp contrast most of the listed firms, however, posted a 23 percent quarter-on-quarter growth in net profit during the second quarter, largely due to the improved economic fundamentals.

Nearly 1,057 enterprises have released their interim statements so far and of this 80 percent have reported a profit for the first six months, compared to 75 percent in the first quarter, according to statistics from Shanghai Securities News. There are around 1,600 listed Chinese firms on the Shanghai and Shenzhen bourses.

However, compared with the same period of last year, their net profit for the first six months is still down 10.7 percent.

"The year-on-year decrease is understandable as the base for 2008 was high," said Dong Chen, head of research, Southwest Securities.

Leading the profit growth in the first half has been property firms. With the country's property sector seeing a strong rebound in the second quarter, most of the listed realty firms reported sharp profit growth in the first half.

Net profit of the 40 property developers who have released their interim statements so far has gone up by nearly 30 percent year-on-year.

"We expect the performance of listed companies to improve in the following months, and most of them may see positive growth in profits during the fourth quarter," said Dong.

Banking, real estate and other consumption related industries would continue to be the favorite of investors, he said.

The better market confidence has also seen mutual funds increased their stock holdings in the second quarter. By the end of June, mutual funds held 22.6 billion pieces of shares among the top 10 shareholders of 619 listed companies, up 9 percent than the previous quarter.