Chinese firms' reports reveal reform, growth outlook

Go diverse and online

Despite the overall slower growth rate, some black horses stood out among the traditional players.

Listed fund firms earned about 9.6 billion yuan in the first half of 2014, down over 50 percent from last year's total profits. However, online monetary funds stood out with strong performances. Tianhong Asset Management Co, Ltd, operator of the booming Yu'ebao wealth management product, was the top earner in the sector.

"Shares in the service sector will face downward pressure in valuation as the economy slows down. Continued growth may depend more on production efficiency than production factors, and the Internet will be a powerful catalyst," said Xiao Zhigang, a fund manager with Tianhong.

Sinopec, one of China's top ten earners, saw its half-year net profits up 7.5 percent year on year thanks to its diversification strategy. Its wholly owned subsidiary, Sinopec Sales, introduced external social and private capital to transform itself from an oil product provider to a comprehensive service agent in late June. It teamed up with RT-Mart, S.F. Express and Tencent to diversify its services and marketing channels in July and August. [ The non-oil business of Sinopec Sales has huge potential with mobile Internet platforms. Sinopec will leverage its existing platforms and expand into new business, including convenience retail, car services, online-to-offline services, financial services, environmental protection and advertising, Fu Chengyu, chairman of Sinopec, noted in the company's interim earnings conference.

Manufacturing lags financial services in profits	China's service sector activity rebounds to 17-month high: HSBC