2018-08-15 08:38:00 | Source：National Bureau of Statistics on July 27, 2018
The financial data released by the National Bureau of Statistics on July 27 show that profits of industrial enterprises above the designated scale grew by 17.2% on a year-on-year basis in the first half of 2018, an increase of 0.7 percentage point over that from January to May. Of it, the profits grew by 20% in June, down 1.1 percentage points over May.
I. The supply-side structural reform achieved notable effects.
First, cost continued to go down. In the first half of the year, the cost expense per RMB 100 of principal business income of industrial enterprises above the designated scale was RMB 92.57, down RMB 0.4 over the same period of the last year. Of which, the cost per RMB 100 of principal business income registered RMB 84.42, a decrease of RMB 0.37 year on year. Second, the leverage ratio went down further. By the end of June, the liability-to-asset ratio of industrial enterprises above the designated scale dropped by 0.4 percentage point to 56.6% over the same period of the last year. Of these, the liability-to-asset ratio of state-controlled enterprises reported 59.6%, down 1.2 percentage points year on year. This signals that the de-leveraging drive has achieved more remarkable progress at these enterprises.
II. Industrial enterprises see their overall benefits improved on the whole.
First, profitability improved obviously. In the first half of the year, the principal business revenue of industrial enterprises above the designated scale grew at the rate of 6.51%, up 0.41 percentage point year on year. Second, finished goods saw their inventory turnover speeding up. As at the end of June, the inventories of finished goods produced by industrial enterprises above the designated scale needed 16.4 days to turn into cash. The duration was shortened by 0.1 day year on year.
III. New profits are mainly attributed to such sectors as steel, construction materials and oil extraction.
The industries that made relatively large contributions to the profit increase in the first half of the year mainly included oil and natural gas extraction, ferrous metal smelting and rolling, non-metal mine products, chemical raw material and chemical products, and electricity & heating production and supply. These industries generated a profit growth rate of 310%, 110%, 44.1%, 29.4% and 27.4%, respectively. Their profit increases combined accounted for 67% of those generated by all industrial enterprises above the designated scale nationwide.
IV. Price spikes help profit increase fast this June.
Even though industrial production grew in June at a rate slower that that in May, price hikes provided noted impetus for profit increases. In June, PPI went up by 4.7% year on year, an increase of 0.6 percentage point over last month. In June, PPI rose by 5.1% year on year, an increase of 0.8 percentage point over the last month. According to the related calculation, the contribution to profit increases by price movements in June went up by 0.3 percentage point over May.