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Industrial Profit Maintains Double-digit Growth in the First Quarter

Submit Time:24-05-2018 | Zoom In | Zoom Out

Author: | Source:National Bureau of Statistics

Abstract:

According to the financial data of industrial enterprises released by the National Bureau of Statistics on April 27, from January to March, 2018, the profits of industrial enterprises above designated size across China grew by 11.6%, continuing to maintain the double-digit growth. Profit structure was optimized and enterprise revenue continued to be improved. The pattern where industrial economy maintained a steady performance with good momentum for growth kept the same.  

First, profitability increased, and the share of manufacturing industry rose. Between January and March, the profit margin of main business income of industrial enterprises above designated size was 6.18%, a year-on-year increase of 0.11%. Between January and March, among the total profits of all industrial enterprises above designated size, the share of manufacturing was 83.9%, up by 0.3% compared to January and February; the share of mining was 8.9%, down by 0.2% compared to January and February. According to estimates, profits of industrial strategic emerging industries grew by 10.7% between January and March, maintaining relatively fast growth momentum.  

Second, cost and leverage ratio decreased. Between January and March, the cost of per 100 yuan of income from main business operations for industrial enterprises above designated size was 92.61 yuan, a year-on-year decrease of 0.13 yuan; of which, the cost of per 100 yuan of income from main business operations was 84.33, down by 0.18 yuan on a year-on-year basis. In late March, the asset-liability ratio of industrial enterprises above designated size was 56.4%, down by 0.8% on a year-on-year basis. The asset-liability ratio of state-holding companies was 59.5%, down by 1.5% on a year-on-year basis.  

Third, the turnover of finished products inventory and account receivable was accelerated. In late March, the turnover of finished products inventory for industrial enterprises above designated size was 16.8 days, reduced by 0.1 day on a year-on-year basis; the average collection period of account receivable was 45.3 days, reduced by 0.1 day on a year-on-year basis.  

In March, profits of industrial enterprises above designated size grew by 3.1% on a year-on-year basis, with the growth significantly lower than that from January to February by 13%, mainly due to the following factors. 1. The Spring Festival was delayed. The Spring Festival of 2018 fell on mid-to-late February. March 2 was the Lantern Festival. Some enterprises did not resume operation. Actual days of production and operation were less than those over the same period last year. Under the influence, the growth of industrial added value and main business income for industrial enterprises above designated size slowed down. 2. The rise of industrial product price went down. In March, PPI increased by 3.1% on a year-on-year basis, down by 0.9% compared to that in January and February; IPI increased by 3.7% on a year-on-year basis, down by 1.1% compared to that in January and February. According to preliminary estimation, the profits grew by about RMB 62.46 billion yuan on a year-on-year basis due to price change, pulling the profit growth up by 10.9%, down by 5.9% compared to January and February, a significant drop. 3. Financial expenses including exchange loss increased. Since the end of last year, the growth in financial expenses of enterprises picked up because of exchange loss, increase in net interest expenses and so on. In March, financial expenses of industrial enterprises above designated size grew by 15.1% on a year-on-year basis, faster than January and February, and last year by 2.8% and 8.6%, respectively.  


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