SHANGHAI, Sept 28 (Reuters) - China stocks inched up in thin trading on Monday, as investors remained cautious while shrugging off data showing profits of Chinese industrial companies in August declined at the sharpest rate in four years.
The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 0.3 percent, to 3,242.75. The Shanghai Composite Index also gained 0.3 percent, to 3,100.76 points.
In August, profits of industrial companies dropped 8.8 percent from a year earlier, the biggest on-year fall since the National Bureau of Statistics began monitoring such data in 2011.
The NBS had said on Friday that China's economic growth will be largely stable in the third quarter as the impact from a stock market plunge will be limited.
On Monday, small-caps outperformed amid the flat market, with Shenzhen's start-up board ChiNext jumping 4.7 percent, and the CSI500 index, a barometer of small-caps, up 1.8 percent.
Sector performance was mixed. The CSI300 IT Index jumped 3.6 percent, while the bank shares fell nearly 1 percent.
Stocks of businesses in cyber security, including Feitian Technology Ltd and Venustech Group Inc surged, after U.S. President Barack Obama said he had reached "a common understanding" with Chinese President Xi Jinping on curbing economic cyber espionage. (Reporting by the Shanghai Newsroom and Kazunori Takada; Editing by Richard Borsuk)