Chinese mainland listed firms have posted a sparkling average of 70 percent growth in their first-half profits, fanning euphoria over their stock-price movements in the second half of this year.

But experts cautioned that as a large chunk of the half-year earnings at listed firms was mainly from equity investments, the euphoria may be short-lived when investors worry about valuations and then take profits.

Companies traded in Shanghai and Shenzhen chalked up a combined net profit of 323.2 billion yuan (US$42.8 billion) from January to June, a jump of 69.9 percent from a year ago, exchange data showed on Friday.

These firms generated a cumulative gross revenue of 3.54 trillion yuan in the six months ended June 30, accounting for a third of the country's first-half gross domestic product, according to the data.

Earnings per share hit 0.193 yuan on average in the first half, up 52.60 percent year on year while the average return on equity was 7.67 percent, a climb of 37.3 percent from a year earlier.

"The growth figures were as impressive as expected," said Liu Minglei, a Guoyuan Securities Co investment adviser. "Some large-cap enterprises posted blistering earnings in the first half on the back of a sustained economic expansion."

Among the more eye popping performances, China Ping An Insurance reaped a whopping 104 percent surge in interim net profit while that for China Citic Bank soar 86 percent from a year before.

Industrial & Commercial Bank of China, the nation's No. 1 lender, earned an impressive 62 percent rise in net profit while China Petroleum & Chemical Corp, Asia's top oil refiner, boosted its half-year net by 65 percent.

Although these very eye-catching results were helped by improvements in operations, a booming stock market was also a contributory factor, industry insiders said.

"It's very common that a mainland listed firm owns stakes in other public companies in what is known as cross shareholding," said Lu Ming, a China Securities Co trader.

"Domestic shares have been soaring since early last year, which has significantly boosted the gains from the listed firms' equity investments."

Mainland-listed companies raked in a collective 115.6 billion yuan in earnings from investments including those in stocks in the first half, a jump of 182.4 percent year on year, the Shanghai Securities News reported on Friday, citing Wind Info.

Chinese mainland yuan-denominated A shares have nearly doubled in value this year on top of a 130-percent rise last year, spurring some analysts to predict deep corrections in coming months.

As regulators are striving to channel liquidity out by encouraging institutions and individuals to invest in stocks overseas, the market may gradually find itself lacking enough capital to sustain its current blistering growth, they noted.

"The profitability of listed firms will definitely be hurt if domestic stocks start to decline, which will in turn batter these companies' equity investments," said Guoyuan's Liu. "If corrections linger, the problem will be exacerbated and investor confidence will certainly be dampened."

However, some market observers are more optimistic about corporate fundamentals and believe the shares won't suffer huge downward pressure towards the end of the year.

They noted that 287 mainland-listed firms have already said they expected their third-quarter profit to rise heavily, and 20 of them estimated their earnings may jump by more than 500 percent.

"I don't see the risks of a sudden slump against the background of solid fundamentals (of these companies)," said Wu Ming, a Citic Securities Co dealer. "The overall stock performance may be a bit bumpy but quality blue chips are expected to stay strong and help steady the broad market."