In May, The Profit Growth Rate Of Industrial Enterprises Shifted From Negative To Positive: An Increase Of 1.1% Over The Same Period Last Year.

In June 27th, the financial data of industrial enterprises released by the National Bureau of statistics showed that in May 2019, the total profit of Industrial Enterprises above designated size increased by 1.1% compared to the same period last year, while the growth rate was negative, while in April, it dropped by 3.7%.

In response, Hong Zhu, Senior Statistician of the National Bureau of statistics, explained:

First, sales growth has accelerated, profits in some sectors have improved, cost growth has slowed down, and profit growth has shifted from negative to positive.

This can be seen from official data: first, sales growth has accelerated significantly. In May, the operating income of Industrial Enterprises above designated size increased by 5% compared to the same period last year, and decreased by 0.7% in April.

Second, the main equipment manufacturing industry and the coal industry have recovered profits. In May, driven by new product listing, production and sales rebounded and the base period was relatively low, the profit of the electronics industry decreased by 6.6% compared with the same period in April, a drop of 24.4 percentage points higher than that in April. The profit of the electrical machinery industry increased by 19.7% percentage points, the growth rate of the electrical machinery industry increased by 18 percentage points, the profits of the general equipment and special equipment industry increased by 7.9% and 17.3% respectively, and the profits of the general machinery and equipment industry decreased by 14.1% and 12% respectively. The above 5 industries combined affect the profit growth of all industrial enterprises above Designated Size, up 6 percentage points from April.

Finally, the cost growth rate has dropped. In May, the total cost of four industrial enterprises above designated size increased by 6.2% compared to the same period last year, and the growth rate dropped by 1.9 percentage points over April. Among them, the impact of foreign exchange gains and losses, financial expenses fell 3.9% compared to the same period, an increase of 0.3% in April. After calculation, the growth rate of the four expenses dropped, and the profit growth rate of all industrial enterprises above designated size was 2.6 percentage points higher than that in April.

Two, the profit growth rate of high-tech manufacturing industry and strategic emerging industry has shifted from negative to positive: in May, the profit of high-tech manufacturing industry and strategic emerging industry increased by 6.2% and 6.7% respectively, and the growth rates were 5.1 and 5.6 percentage points higher than that of all industrial scale in the year of April, respectively, decreasing by 15.1% and 8.4% respectively in April.

Three, business efficiency has improved: output per capita has improved. By the end of 5, the per capita business income of Industrial Enterprises above designated size was 1 million 328 thousand yuan, up 111 thousand yuan compared with the same period last year. At the same time, the turnover of finished goods has accelerated. By the end of 5, the turnover of finished product inventory in Industrial Enterprises above designated size was 17.5 days, a decrease of 0.1 days compared with the same period last year. In addition, the leverage ratio continued to decrease. At the end of 5, the asset liability ratio of Industrial Enterprises above designated size was 56.8%, down 0.6 percentage points compared with the same period last year. Among them, the state owned enterprises' assets and liabilities ratio was 58.3%, down 1.4 percentage points from the same period.

The growth rate of non state enterprises has been rising again. According to statistics of Sino Thai securities, state-owned enterprises fell 9.7% in the same month, down 11.6 percentage points from the previous month. Private enterprises, joint-stock enterprises and foreign enterprises increased by 15.2%, 5% and -8.3% respectively, up 17.6, 6, 1 percentage points from the previous month.

However, for the profit data of industrial enterprises in May, Yang Chang, head of the policy group of Zhongtai Securities Research Institute, told reporters, "generally speaking, the profit of industrial enterprises in May shows short-term repair, but the continuity needs to be observed."

Because in his view, corporate profitability is still significantly lower than the same period last year. Short term accounts receivable upgrading and finished product inventory conversion showed that the number of credit sales increased and the liquidity of enterprises did not improve. There is a factor of caliber adjustment in the repair of non state owned enterprises' profits, especially the profit growth rate of foreign enterprises is still in the negative range, which deserves our attention.