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Profits of Industrial Enterprises Continue Recovery Growth

Submit Time:24-05-2017 | Zoom In | Zoom Out

Author:He Ping | Source:National Bureau of Statistics, PRC

Abstract:

  The statistics released by China’s National Bureau of Statistics (NBS) on March 27 this year show that, in January and February 2017, total profits of industrial enterprises above designated scale increased by 31.5% year on year, an increase of 29.2 percentage points over December last year, or 23 percentage points higher than that of last year. Generally speaking, the current profits of industrial enterprises still belong to recovery growth.

  I. Production quickened, prices rose, and costs fell, enabling the growth of corporate profits to accelerate significantly

  The profits of industrial enterprises grew faster than those in December last year, with the main reasons listed as follows:

  First, the growth of industrial production accelerated. In January and February, industrial production steadily improved since last year, the industrial added value above the designated scale increased by 6.3% year on year, or 0.3 percentage points faster than that in December last year, the output of more than half of the major industrial products saw an accelerated growth rate or narrowed decline over December last year.

  Second, product prices rose markedly. In January and February, industrial producers’ ex-factory prices rose 7.3% year on year, or 1.8 percentage points higher than that in December last year. Among which, February saw an increase of 7.8%, hitting a new high since 2008.  According to preliminary calculation, due to the ex-factory prices rising 7.3%, the main business income of enterprises increased by 1166.43 billion yuan (US$169.2588 billion); due to the purchase prices of industrial producers rose 9.1%, main business costs of enterprises increased by about 936.2 billion yuan (US$ 135.8406 billion), outgoings and revenues balanced out, profits increased by about 230.23 billion yuan (US$ 33.4059 billion), and the increments significantly expanded over December last year.   

  Third, unit costs and unit expenses fell faster. In January and February, the costs were 84.91 yuan per 100 yuan main business income of industrial enterprises above the designated scale, a year-on-year decrease of 0.28 yuan, whereas December last year saw a year-on-year increase. The total of the three charges per 100 yuan main business income was 7.7 yuan, a year-on-year decrease of 0.46 yuan, or 0.32 yuan less than that in December last year.  

  Under the effect of accelerated production, rising prices, etc., in January and February, profits increased substantially in the industries, such as the coal mining, washing and dressing industry, the ferrous metal smelting and rolling processing industry, the petroleum and natural gas extraction industry, the petroleum processing, coking and nuclear fuel processing industry, and chemical raw materials and chemicals manufacturing, pulling the profits of all the above-scale industries to increase significantly over December last year. Affected by petroleum, steel and other industries, the performance of state-owned enterprises has obviously recovered. In January and February, profits of state holding enterprises grew by 100.2% year on year, whereas December last year witnessed a year-on-year decrease of 11.6%, among which, the profits of the enterprises directly under the central government rose 66.3%, whereas December last year saw a decrease of 17.3%. 

  II. Other indicators reflecting corporate performance have also markedly improved

  First, the profit TEXT-ALIGN: justify; BACKGROUND: white">Second, remission occurred for the first time in the difficulty of payment collection. At the end of February, the average payback period of the accounts receivable of the above-scale industrial enterprises was 41.3 days (due to seasonal factors, higher than that at the end of last year), registering a decrease of 1 day year on year, the first year-on-year decrease ever in recent years.

  Third, to some extent, the inventory growth has accelerated; however, the turnover days of finished products continued to decrease. At the end of February, the finished products in the above-scale industrial enterprises increased by 6.1% year on year, with a growth rate of 2.9 percentage points faster over the end of last year. The turnover period of finished products was 15.4 days (due to seasonal factors, higher than that at the end of last year), a year-on-year decrease of 1.1 days, showing a year-on-year downward trend.   

  Meanwhile, it is noteworthy that industrial profits registered faster growth in January and February, much dependent upon the rapidly rising prices of coal, steel and crude oil. Despite the fact that the profits in the industries, such as coal, steel and petroleum extraction, registered faster growth, they still belonged to recovery growth.


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