China June Industrial Profits Rise On Robust Production, Sales

--All Major Industrial Indicators Improved in June, NBS Says

--Profits Year-to-Date Slip Slightly From Jan-May Period

     BEIJING (MNI) - Chinese industrial companies saw profits accelerate in June

behind rapid production growth and a rise in product sales, data from the

National Bureau of Statistics (NBS) released Thursday show.

     The combined profits of Chinese industrial firms rose 19.1% year-on-year to

CNY727.78 billion in June, up 2.4 percentage points from the 16.7% y/y growth

rate in May and also much higher than a rise of 5.1% last June, the NBS said. 

     The NBS attributed the surge to faster growth in industrial output and

product sales. "The added value of industrial output increased 7.6%

year-on-year, up 1.1 percentage point from May, while main business income rose

13.7% y/y, 0.6 percentage point more than that in May," said He Ping, an

economist at the NBS.

     Output prices grew 5.5% y/y, unchanged from May, but input price growth

slowed 0.7 percentage point to 7.3% compared with May. The margin contributed a

total of CNY80.9 billion to June profits.

     For the first six months of this year, total industrial profits rose 22.0%

to CNY3.63 trillion, lower than the 22.7% gain in the first five months but

sharply higher than 6.2% growth in the same period of last year.

     An increase in profits in three key industrial sectors contributed to a

gain of 4.1 percentage points for total industrial profits in June. The three

sectors were automobiles, ferrous metal processing and electronic product

manufacturing. 

     Profits of the ferrous metal processing sector rose 1.1 times year-on-year

in June, compared with 5.7% growth in May, due to the surge in steel prices and

low comparison base, the NBS said. Profits of automobile manufacturers rose

19.6% y/y in June, 15.6 percentage points higher than in May.

     Overall costs for industrial firms fell in June, ending the three

consecutive months of cost growth, He said. In June, the cost of every CNY100 of

income generated by an industrial firm's primary business stood at CNY93.11,

CNY0.18 lower than last June, He said.

     The structure of profit growth also improved, He said, adding that the

equipment manufacturing sector accounted for 40.7% of profit gains, 11.3

percentage points higher than in May, while the mining sector accounted for

22.1%, 13.4 percentage points lower than in May, the second monthly decline in a

row.

     Out of 41 main industries, 38 saw profit growth in the first half of year,

the NBS said.

     Mining sector profits surged 13.4 times year-on-year to CNY243.59 billion

and profits of the coal processing sector surged 19.7 times compared with the

same period last year, the NBS said.

--MNI Beijing Bureau; +86 (10) 8532 5998; email: marissa.wang@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: vince.morkri@marketnews.com

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