BUSINESS China's industrial profits rise 1.1 pct in May as sales quicken


China's industrial profits rise 1.1 pct in May as sales quicken


04:28, June 28, 2019


(Photo: AP)

Bolstered by improving sales and better margins, profits for China's industrial companies rose in May, bucking a months-long downtrend.

Profits rose 1.1 percent in May from a year earlier to 565.6 billion yuan ($82.21 billion), according to data released by the National Bureau of Statistics (NBS) on Thursday, following a 3.7 percent fall in April.

In the first five months, industrial firms earned profits of 2.38 trillion yuan, down 2.3 percent from a year earlier, compared with a 3.4 percent drop in January-April.

The uptick in May was driven by quicker sales and slower increases in corporate costs, Zhu Hong of the statistics bureau said in a statement accompanying the data, adding that better margins in equipment manufacturing and the coal sector attributed to the bulk of the increase.

Moreover, profits in high-tech manufacturing and emerging industries both turned positive in May after declining the month before.

"The modest pick-up in high-tech industry might suggest the effect of value-added tax (VAT) cuts is kicking in," said Lu Ting, chief China economist at Nomura.

China's overall tech industry profits rose last month, with high-tech manufacturing and strategic emerging industries increased by 6.2 percent and 6.7 percent respectively.

Leverage continues to decrease. At the end of May, the asset-liability ratio of major industrial enterprises was 56.8 percent, down 0.6 percentage point year-on-year. The asset-liability ratio of state-owned holding companies was 58.3 percent, down 1.4 percentage point year-on-year.

Private sector profits rose 6.6 percent in January- May, from 4.1 percent in the first four months.

Profits at China's state-owned industrial firms were down 9.7 percent on an annual basis for the first five months, according to the statistics bureau.

Terms of Service & Privacy Policy

We have updated our privacy policy to comply with the latest laws and regulations. The updated policy explains the mechanism of how we collect and treat your personal data. You can learn more about the rights you have by reading our terms of service. Please read them carefully. By clicking AGREE, you indicate that you have read and agreed to our privacy policies

Agree and continue