A-share companies post 6.5% rise in net profit

An investor checks share prices at a brokerage in Huaibei, Anhui province, April 21, 2015. [Asianewsphoto by Xie Zhengyi]

A-share companies reported total net profit of 2.43 trillion yuan ($390 billion) in 2014, up 6.5 percent, with half generated by listed banks, said Securities Times on Monday.

Dragged by economic slowdown, the growth has slowed from 15 percent year-on-year increase in 2013.

Sixteen listed banks posted aggregate of 3.33 trillion yuan revenue and 1.24 trillion yuan net profit in 2014, up 14.5 percent and 7.7 percent respectively, marking the sector with the biggest share of profit, according to the newspaper.

Of nearly 2,700 listed companies, 358 or 13 percent saw their earnings double in 2014, while 201 or about 7 percent reported theirs shrank by half, according to data compiled by Investor Journal as of Wednesday.

According to Investor Journal, 10 listed companies, including IT provider Founder Technology Group, financial information provider East Money and clouding computing service supplier Inspur, saw their net profits surge by more than 10 times in 2014.

"We note that financial performances of companies are diverging from each other even within the same sector, and companies that are more efficient and more innovative would be more likely to win the competition," said financial group Nomura in a note in April.

The benchmark Shanghai Composite Index jumped nearly 53 percent as the best-performing market last year. The gauge gained another 38.4 percent so far this year as of April 29.

Shanghai-listed companies that have released last year's financial results in comparison reported a mere 5 percent increase in net profit to total 2.06 trillion yuan, according to Securities Times.

"When a young bull turns into a miracle bull, it is time for investors to be extra cautious," continued the note, adding that China's economy growth is moderating under the "new normal" and businesses are facing greater challenges such as slower growth in demand and higher labor costs.

Nomura warned that high margin financing in A-shares will raise market volatility.