Shanghai - AFP
China\'s Baoshan Iron and Steel Co said Tuesday that its first-half net profit surged more than 89 percent from a year earlier, helped by a sale of assets. Net profit rose to 9.61 billion yuan ($1.51 billion) for the first six months, compared with 5.08 billion yuan for the same period of 2011, the listed unit of industry giant Baosteel Group said in a statement. The firm attributed the rise in net profit to the sale of some of its stainless steel and special steel assets, which netted 9.09 billion yuan, to two entities controlled by its state-owned parent. However, operating profit slumped 59.8 percent from a year earlier to 2.72 billion yuan in the first half, due to weakening demand and declining steel prices in China as the domestic economy slowed. Revenue for the first half dropped 11.7 percent year-on-year to 98.10 billion yuan, Baoshan said. Domestic steel makers will still face pressure in the second half of this year despite China\'s efforts to spur economic growth, as domestic steel prices will likely remain at low levels due to oversupply in the market, it said. China\'s economy recorded 7.6 percent growth in the second quarter -- the slowest pace in more than three years -- prompting Beijing to cut interest rates and slash the amount banks are required to hold in reserve to encourage lending. In a separate statement, the Shanghai-listed steel maker said it plans to spend up to 5.0 billion yuan to buy back its shares for no more than 5.0 yuan apiece to boost investors\' confidence in the company. Baoshan\'s shares jumped by their daily 10-percent limit to 4.48 yuan in morning trade in Shanghai after the announcements.