After the recent spate of listings, and some more wobbles in the market, People’s Daily reports that profits at the 1,392 listed firms in China rose by an average of 7.54 percent in the first half of the year (though the figure excludes results from four companies). The article notes:
“Strong growth by the Bank of China, Sinopec and other blue chips boosted the overall performance of the listed firms…According to the report, the top 20 firms made net profits of 71.87 billion yuan in the first half year, accounting for 56.3 percent of total net profits for all listed firms. “
Another report, by Wind Information (reported in www.China.org.cn ), looks at a smaller selection of companies (540 with profits up 8.6 percent in the first half). The report notes that issues impacting profits included:
• High demand for resources: “profits grew fastest in the non-ferrous metal sector, increasing 105.45 percent”.
• Rise in fixed asset investment: “stimulated the machinery sector. This year is the first year of the 11th Five-year Plan, so a large number of construction projects are being kicked off”.
• Government property policies: “profits in the real estate industry [rose] by 37.92 percent. However, the figure was 82 percent for the same period last year…Government macro-control policies aimed at reining in housing prices have shrunk the industry’s profit.”
People’s Daily also refers to the impact of ongoing stock market reform:
“The massive restructuring of listed firms sparked by the reform seeking to transform non-tradable state-owned shares into fully tradable shares also helped brighten the figures…The reform has improved the quality of listed firms’ assets and enhanced their ability to make profits, the China Securities Journal said…So far 1,144 listed firms have completed or are in the process of completing the reforms. “
That said, there is still a long way to go, and stock prices will continue to be tied to policy initiatives (not just market and management performance) for some time to come.
See news source:
China’s listed firms record 7.54 pct growth in net profit in H1 
People’s Daily Online – Beijing,China
Net profits for 1,388 firms listed on China’s Shanghai and Shenzhen stock exchanges grew by 7.54 percent year on year in the first half of the year, an …
Net Profit of 540 Listed Firms Up 8.6%