Major industrial companies back among profits in May

China's major industrial firms posted profits year on year in May, reversing the decline in April, while the drop in the period from January to May was less than that in the first four months.

Profits of companies with annual revenue of more than 20 million yuan (US$2.9 million) rebounded 1.1 percent from a year earlier last month to 565.56 billion yuan, data from the National Bureau of Statistics showed.

In comparison, industrial profits in April declined 3.7 percent.

Between January and May, the accumulated profits dropped 2.3 percent from the same period last year.

Taking into account factors such as adjustments to the statistical system, enhanced enforcement of statistics, elimination of duplicate data, reforms of enterprises, and the fourth national economic census, the decline in January-May narrowed by 1.1 percentage points from the first four months, the bureau said.

The rebounding profit growth was mainly due to accelerating sales growth, said Zhu Hong, a senior statistician of the industrial office at the bureau.

Sales picked up markedly, with the operating income of major industrial companies jumping 5 percent from a year earlier in May, after falling 0.7 percent in April.

Zhu highlighted the rising profits of major industries such as equipment manufacturing sector and the coal industry.

Profits in the electronics sector fell 6.6 percent year on year in May, down 24.4 percentage points from April, driven by a rebound in production and sales with new product launches and a low base over the same period last year. 

Profits in the electrical machinery sector rose 19.7 percent, 18 percentage points faster than April, while those in the general equipment and special equipment sectors increased 7.9 percent and 17.3 percent, respectively, reversing the declines of 14.1 percent and 12 percent in April. Profits in the coal mining sector rose 20.3 percent after falling 13.2 percent in April. 

Also of note, profit growth in high-tech manufacturing and strategic emerging industries rallied by 6.2 percent and 6.7 percent year on year, respectively, last month, compared with slumps of 15.1 percent and 8.4 percent in April.

The leverage ratio continued to fall, with the debt-to-asset ratio of major industrial enterprises down 0.6 percentage points from a year earlier to 56.8 percent at the end of May, among which the ratio for state-owned enterprises was 58.3 percent, 1.4 percentage points lower than the same period last year.