SOE profits jump 24.6 percent in first 10 months

State-owned enterprises posted a 24.6 percent rise in profits in the first 10 months of the year, driven by the metal, coal, and petrochemical sectors, the Ministry of Finance said on Tuesday.

SOEs notched up total profits of about 2.4 trillion yuan (US$361.7 billion) in the January-October period, the ministry said in a statement.

That compared with 24.9 percent year-on-year growth in the first nine months but improved from the mere 0.4 year-on-year profit growth in the first ten months last year.

Centrally-administered SOEs made about 1.55 trillion yuan in profit, up 17.8 percent year on year, while locally-administered SOE profits were 837 billion yuan, up 39.4 percent.

SOEs raked in nearly 42 trillion yuan in revenue in the first 10 months, up 15.4 percent on the same period last year, and paid 3.4 trillion yuan in tax, up 11.6 percent.

While the metal, coal, petroleum and petrochemical sectors posted profit growth,  the electricity sector saw a fall.

The improvement of SOE profitability was achieved as the government deepening supply-side reforms in the state-owned sector to improve efficiency.

Mixed ownership and market-oriented management were encouraged to reduce cost and boost earnings.

The SOEs are targeted to complete corporate governance reform by the end of this year and lead innovation-driven development in China’s economic re-balancing.

Moody's Investors Service expected that the revenue and profitability of Chinese corporates will likely remain stable in 2018.

China’s Purchasing Managers' Index, which measures the price of goods at the factory gate, rose 6.9 percent year on year October.

The manufacturing sector stayed above the boom-bust mark for the 11th month in a row last month as the official PMI stood at 51.6.