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Industrial Profits Continue Growth in July

Supply-side Reform Achieves Constant Success

Submit Time:25-09-2017 | Zoom In | Zoom Out

Author: | Source:People's Daily (August 28, 2017, p. 02)

Abstract:

The financial data released by the National Bureau of Statistics on August 27 show that profits of industrial enterprises above designated size grew by 21.2% on a year-on-year basis from January to July, down 0.8 percentage point over the period from January to June. Profits in September realized year-on-year growth of 16.5%, down 2.6 percentage points over June. 

Dr. He Ping, from the Department of Industry, National Bureau of Statistics, analyzed that the slowdown in profit growth was mainly attributable to short-term non-economic factors such as enterprises' holidays and production suspensions due to extreme high-temperature. Overall, with the ongoing progress of the supply-side structural reform, corporate profitability improved year on year, and industrial profits continued to maintain a high growth rate. 

Cost reduction became more effective. In July, the cost and expense per 100 yuan of main business income of industrial enterprises was 93.12 yuan, a year-on-year decline of 0.29 yuan, up 0.11 yuan over June. Specifically, the cost per 100 yuan of main business income was 85.9 yuan, a year-on-year decline of 0.13 yuan; the expense per 100 yuan of main business income was 7.22 yuan, a year-on-year decline of 0.16 yuan. 

Reduction of the corporate leverage ratio made positive progress. At the end of July, the asset-liability ratio of industrial enterprises above designated size was 55.8%, down 0.7 percentage point year on year. The asset-liability ratio of state-controlled enterprises was 61.1%, down 0.5 percentage point year on year. 

Depletion of stocks of industrial finished products continued to advance. At the end of July, finished product stocks of industrial enterprises above designated size increased by 8% year on year, down 2.1 percentage points over the growth of the main business income in July; the turnover of finished products was 13.7 days, down 0.8 day year on year. 

Turnover of corporate capital continued to accelerate. At the end of July, the average payback period of receivables of industrial enterprises above designated size was 37.1 days, down 1 day year on year. 

The profit margin increased further year on year. In July, the profit margin of main business income of industrial enterprises above designated size was 5.97% (lower than that in June due to seasonal factors), an increase of 0.33 percentage point year on year, up 0.04 percentage point over June. 

The revenue of state-controlled enterprises rebounded significantly. In July, among the industrial enterprises above designated size, the profits of state-controlled enterprises increased by 34.2% year on year, up 13.5 percentage points over June. Among them, the profits of central enterprises increased by 8.5% year on year, reversing the 6.5% year-on-year decline in June. This was mainly due to significantly rising revenue in oil processing, coal and steel industries. 


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