China's central SOEs post steady profit growth in first quarter

China’s centrally-administered state-owned enterprises posted steady profit growth in the first quarter bolstered by industrial upgrading, the State-owned Assets Supervision and Administration Commission said today.

Profits for the SOEs jumped 20.9 percent from a year ago to 377.06 billion yuan (US$60 billion) in the first three months of the year, SASAC said, adding that March's profits notched a record monthly high of 169.87 billion yuan.

The SOEs posted the best performance in 2017 over the past five years, with profits over the period rising 15.2 percent annually to 1.42 trillion yuan, according to SASAC.

Peng Huagang, a SASAC spokesman, attributed the profit growth to industrial upgrading and cost management.

The centrally-administered industrial SOEs posted a 26.7 percent annual surge in profits to 212.81 billion yuan in the first quarter – 5.8 percentage points above the average rate of central SOEs, Pang said.

Meanwhile industrial profits contributed nearly 70 percent to the total profit growth — the largest driver of central SOEs’ performance, he added.

Both traditional industrial giants and advanced and emerging manufacturing companies are upgrading. Coal companies added 10 percent in fixed-asset investment compared with the same three-month period last year, while the automobile industry’s FAI surged 46.9 percent annually.

Steel makers benefited from the continuing supply-side reform, which has cut domestic steel output capacity by 16 million tons. Central steel SOEs posted 129.8 percent year on year jump in profit to 6.90 billion yuan in the first quarter.