High-tech manufacturing profit growth exceeds 20% Industrial profit growth slows down

According to the financial data of industrial enterprises released by the National Bureau of Statistics recently, from January to April, the profits of industrial enterprises above designated size increased by 6.5% year-on-year, and the growth rate dropped by 0.9 percentage points from the first quarter. Among them, profit in April increased by 4.2%, and the growth rate dropped by 6.9 percentage points from March.
Liang Shu, a researcher at the Bank of China International Finance Institute, said that the decline in industrial profit growth was mainly due to the slowdown in economic demand and non-main activity income. In April, the growth rate of investment, consumption and exports all fell back. It was difficult to form a strong support for industrial production and sales. The main business income of the company increased by 2% year-on-year, down 2.6 percentage points from March. At the same time, the pulling effect of non-main activity income on profits has not been sustained. Corporate investment income increased from 20.4% in March to 19.8% in April; net income outside business increased by 56.2% year-on-year, down 12.1 percentage points from the previous month. Contributions from investment income and non-operating net income to industrial new profits decline.
He Ping, director of the Industrial Benefits Division of the Industry Department of the National Bureau of Statistics, said that investment income has turned from rising to falling, and the effect on profit growth has also been shifted from positive to negative, which has caused the profit growth rate of all industrial enterprises above designated size to fall by 2.7 percentage points.
In addition, Guo Lei, chief macro analyst of Founder Securities, pointed out that there was a base effect in the decline in industrial enterprise profit growth in April. The working day in April 2016 is 20 days, and from 2012 to 2015, it is 21 days; the working day in March this year is one more than the same period last year. This will lead to an overestimation of March data and an underestimation of April data.
Many experts believe that, comprehensively, the economic data of industrial enterprises announced this time still shows some positive changes. He Ping believes that positive changes are mainly manifested in four aspects. First, the profits of industrial enterprises in April continued to continue their growth since the beginning of the year. Since the beginning of this year, the profits of industrial enterprises have maintained their growth every month, which has changed the decline in profits in 2015. Second, the profit growth of high-tech manufacturing industry is relatively fast. From January to April, the profit of high-tech manufacturing increased by 21.6% year-on-year, and the growth rate was 15.1 percentage points higher than that of industrial enterprises above designated size. Third, the decline in profits of major raw materials industries such as steel and nonferrous metals has been reversed. Fourth, there was a negative growth in the inventory of finished products. At the end of April, the inventory of finished products of industrial enterprises fell by 1.2% year-on-year, which was the first negative growth in recent years, indicating that the company's inventory pressure is easing, which is conducive to the release of production capacity and production in the future.
Guo Lei said that in the recent industry with relatively high prosperity, the first one is black and non-ferrous smelting, and the growth rate has turned from negative to positive. It obviously benefits from the narrowing of deflation, the high operating rate of midstream and the expected price change. The second is agricultural and auxiliary Food processing and food manufacturing have all rebounded slightly from last month, apparently benefiting from the formation of a reinflation cycle. The third is the electrical machinery and equipment manufacturing industry, with a growth rate of 1.4 percentage points, which should be related to the opening of new assets for fixed assets. High growth is related.
Regarding the trend of improving the efficiency of industrial enterprises in the future, Liang Shuming believes that it is still difficult to be optimistic, and it depends on policy support in the short term. The current downward pressure on the economy is still relatively large, and the problem of overcapacity is still outstanding. It is difficult for industrial enterprises to significantly improve their profits. In particular, state-owned enterprises are concentrated in some areas of heavy industry and overcapacity. From January to April, profits fell by 7.8% year-on-year, a decrease of 2.1 percentage points from the previous month. At the same time, there is still uncertainty in the real estate market and the rebound in commodity prices. The profitability of industries that have contributed more to the new industrial profits in the early stage is not sustainable. However, the implementation of policies such as cost reduction and steady growth in the short term will help the company's operating efficiency to remain stable.