Feb. 27, 2007 (China Knowledge) – Based on the annual reports of 157 Mainland-listed companies, the combined year-on-year growth of the companies came up to 110.27% in 2006 with the companies raking in a total net profit of RMB 16.174 billion and seeing their average weighted EPS at RMB 0.33, growing by 87.52%.

Earnings were boosted by higher revenue, lower expense ratio and increased investment income. Total revenues from the principal activities of these 157 companies increased by 26.34% year-on-year to RMB 249.4 billion.

Total expenses increased to RMB 29.682 billion in 2006 from RMB 27.694 billion in 2005, but the expense ratio, which is derived by dividing expenses by revenue, fell to 11.9% in 2006 from 14.03% in 2005.

Investment revenue stood at RMB 1.824 billion, accounting for 10.2% of net profit, thanks to investment in subsidiaries as well as the high market value of shares held by listed companies.

Most listed companies have massive short-term liquidity, making it easy to invest in the stock market. By the end of the last quarter 2006, the 157 listed companies had total cash on hand of RMB 622.89 billion, a 20% year-on-year growth.

The large amount of cash on hand for these listed companies could signal a large amount of funds flowing into the stock market. Should they use 15% of their cash on hand to invest in the stock market, it could signal a massive amount of RMB 93.4 billion flowing into the equity market.