Profits of China’s central SOEs surge in Q1

2017-04-13
Xinhua

BEIJING — Combined net profits of China’s centrally administered State-owned enterprises (SOEs) soared 26.5 percent in the first quarter to 226.42 billion yuan ($33 billion), the state assets regulator said on April 13.

Among 102 central SOEs, 99 saw profits in the first three months, with 81 companies collecting more profits than a year ago. Forty-three saw profit increases of more than 10 percent, according to a report from the State-owned Assets Supervision and Administration Commission (SASAC).

Strong profits were reported among traditional sectors such as oil, steel, non-ferrous metals and coal, as well as new sectors, including advanced manufacturing, medicine and modern service sectors.

“Central SOEs are off to a good start, signaling that the economy is stabilizing and market demand is gradually improving,” Shen Ying, chief accountant of SASAC, said at a press conference.

Looking forward, many favorable factors will sustain the strong performance of central SOEs, such as rising producer prices, recovering demand and stronger corporate confidence, Shen said.

China’s producer price index, which measures the cost of goods at the factory gate, rose year on year for a seventh month in March, and is likely to continue the steady growth, she said.

China’s manufacturing sector stayed above the boom-bust mark for the eighth month in a row last month. “The business confidence of most central SOEs strengthened,” Shen added.

However, facing both domestic and external uncertainties, central SOEs may see their profit growth slow somewhat later this year, according to Shen.

Their total revenue rose 19.2 percent to 6 trillion yuan, 4 percentage points higher than growth in the first two months.

Central SOEs paid about 530 billion yuan in taxes and fees, up 7.5 percent from a year earlier, the report showed.

Meanwhile, central SOEs in telecommunications, electricity and oil sectors lowered the prices of their products to help cut overall costs.