Guangdong Baolihua New Energy Stock Co Ltd yesterday reported a 630 per cent year-on-year growth in net profit for the first half of the year.

The Shenzhen-listed company is the first to announce its half-year financial results on the domestic Shanghai and Shenzhen stock markets.

Other listed companies will release their half-year reports over the next two months.

Baolihua, which transformed itself into a new energy company providing clean and renewable energy for power generation earlier this year, said that its net profit was 126.5 million yuan (US$15.8 million) for the first six months of 2006.

During this period its turnover of major businesses, including new energy power generation, real estate development and architecture, totalled 515.4 million yuan (US$64.4 million), 184.72 per cent over the same period last year.

"Focusing on new energies, which are supported by government policies, is why the power generation company has had such huge growth," said Yang Ming, an electricity industry analyst from Shenyin & Wanguo Securities.

The company predicted its net profit for the first three quarters would see a year-on-year growth of 400 to 450 per cent.

It also projected its performance would continue to grow when construction of the second-phase new energy power generation project kicks off in October this year, to begin operation in 2008.

However, "Baolihua is a special case," Yang said.

Many market analysts predicted overall performance of the listed companies for the first half of the year would not be good.

Of the 390 listed companies that submitted first-half performance forecasts, 171 predicted growth or profit, 45 firms said their results might decrease, 106 expected to carry over losses, 64 said a shift from profit to loss was likely, and four were unable to predict performance.

"It has been widely agreed that the overall performance for the whole year will turn out better, but it is difficult to tell whether the turning point could be shown in the half-year reports," said Chen Weiqing, a researcher with CITIC Securities.

"The general performance of listed companies from January to June is likely to be lower than the same period last year, but better than the first quarter," Chen said.

However, he added that analysts needed to get data from other firms to draw a final conclusion, as only a small number of companies made performance forecasts.

According to available data, the non-ferrous metals sector and the machinery sector had sound growth, while the food and beverage sector maintained rapid development.

Key sectors such as steel and petrochemicals retained losses due to overcapacity and prices.

"The electricity sector may have a better performance during the first half-year, but the growth rate is likely to stay at the same level it was at a year ago, despite Baolihua's significant growth," Yang Ming said.

Editor: Yan