Oct. 13 (Bloomberg) -- China’s stocks rose to the highest in three weeks, led by energy companies and automakers, after oil prices rebounded and SAIC Motor Corp. said third-quarter profit probably increased.

China Shenhua Energy Co. and China Coal Energy Co., the nation’s top two coal producers, gained more than 2 percent. SAIC Motor, China’s largest carmaker, advanced 2.6 percent. Chongqing Changan Automobile Co., the Chinese partner of Ford Motor Co. and Mazda Motor Corp., rose 1.6 percent after saying it probably returned to profit in the third quarter.

“With the start of the earnings season, investors expect more companies to report results that will beat analysts’ estimates,” Wang Lei, who helps oversee $530 million at Lombarda China Fund Management Co. in Shanghai. “You can probably expect buying opportunities this month.”

The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, rose 41.71, or 1.4 percent, to 2,936.19 at the close, the highest since Sept. 21. The CSI 300 Index, measuring exchanges in Shanghai and Shenzhen, gained 1.5 percent to 3,198.52.

The Shanghai index has climbed 61 percent this year as the country’s gross domestic product rebounded from the slowest growth in almost a decade, boosted by a $586 billion government stimulus package, government subsidies for consumer spending and record new bank loans of $1.1 trillion.

It declined 6.1 percent in the third quarter on concern a slowdown in lending growth will stifle the world’s third-largest economy and new share sales will divert funds from existing equities.

Shenhua, China Coal

Shenhua, the country’s biggest coal producer, climbed 2.7 percent to 33.06 yuan. China Coal, the No. 2, advanced 2.3 percent to 12.38 yuan. Datong Coal Industry Co., the third- largest, gained 5.9 percent to 39.49 yuan.

A measure tracking energy stocks rose 2.4 percent today, the most among the 10 industry groups of the CSI 300 Index.

Crude traded at $73 a barrel in New York in after-hours trading, after settling yesterday at a seven-week high of $73.27. Coal prices at Qinhuangdao port, a benchmark in China, the world’s biggest producer of the fuel, rose for a fourth week.

The price of coal with an energy value of 5,500 kilocalories a kilogram gained 0.8 percent to between 600 yuan ($88) and 615 yuan in the week ended Oct. 12, compared with the last assessment, according to data published by the China Coal Transport and Distribution Association.

Oil Proxy

“In China, coal stocks are regarded as a proxy for oil producers,” said Wang Ye, chief coal analyst at Citic Securities Co. in Beijing. “So you can expect a good performance for coal stocks when oil prices rise. In addition, the inflation expectation has also made resource stocks like coal more attractive.”

Inflation in China may accelerate to at least 4 percent by the middle of next year, because of an increasing supply of money and rising costs for food and property, Deutsche Bank AG said last month.

SAIC Motor added 2.6 percent to 21.16 yuan after saying net income for the first nine months rose more than 70 percent from a year earlier. Vehicle sales increased 47 percent, it said.

Changan Automobile rose 1.6 percent to 11.31 yuan. The company said it may post third-quarter net income of about 267 million yuan to 327 million yuan, compared with a year-earlier net loss of 107 million yuan.

“Consumer-related stocks such as automakers look cheap given quite solid and certain growth prospects next year,” said Zhang Kun, a strategist at Guotai Junan Securities Co. in Shanghai.

China’s passenger car sales in September rose 83.6 percent from a year earlier to 1.015 million units, the China Association of Automobile Manufacturers said after the market closed today.

The following companies were among the most active in China’s markets. Stock symbols are in brackets after companies’ names.

Bank of Ningbo Co. (002142 CH), part-owned by Singapore’s Oversea-Chinese Banking Corp., rose 1.9 percent to 13.69 yuan after saying it plans to raise as much as 5 billion yuan via the private placement of as many as 450 million shares. Funds from the placement will boost the bank’s capital, it said.

China Vanke Co. (000002 CH), the nation’s biggest listed property developer, added 1.4 percent to 11 yuan after saying its September property sales rose 27 percent from a year earlier to 5.46 billion yuan. Property sales for the first nine months rose 29.6 percent to 46.2 billion yuan, it said.

Chongqing Department Store Co. (600729 CH) jumped the 10 percent daily limit for a second session to 26.21 yuan, its highest since March 2008. The stock rating was lifted to “buy” because the company’s purchase of New Century Department Store Co. will boost profit, Shenyin & Wanguo Securities Co. said in a report today.

Guangdong Baolihua New Energy Stock Co. (000690 CH) climbed 7.2 percent to 9.25 yuan, the biggest gain since July 20, after saying third-quarter net income surged 13-fold from a year earlier.

Guangxi Wuzhou Zhongheng Group Co. (600252 CH), an investment holding company that runs pharmaceutical business, advanced 8.1 percent to a record 20.12 yuan. The company said profit for the first nine months probably jumped more than fivefold from a year earlier on increased sales.

Shanghai Zi Jiang Enterprise Group Co. (600210 CH), a manufacturer of packaging materials, rose 2.7 percent to 7.75 yuan after saying third-quarter profit surged 157 percent from a year earlier.

Sinopec Yizheng Chemical Fibre Co. (600871 CH), the unit of Asia’s biggest oil refiner, added 1.2 percent to 6.97 yuan after saying it expects to return to profit in the third quarter, compared with a loss a year earlier.

V V Food & Beverage Co. (600300 CH) climbed 6.3 percent to 7.95 yuan, the biggest gain since Sept. 11, after saying profit for the first nine months probably increased more than 280 percent from a year earlier, because of investment gains from the sale of a wine unit.

--Zhang Shidong. With assistance from Winnie Zhu in Shanghai. Editors: Reinie Booysen, Linus Chua

To contact Bloomberg News staff for this story: Zhang Shidong in Shanghai at +86-21-6104-7014 or szhang5@bloomberg.net

Last Updated: October 13, 2009 03:45 EDT