It seems that the growth tendencies of the
profits and liabilities in state-owned or state holding enterprises (herein
referred to as state-owned enterprises) were slightly different. According to the
Ministry of Finance (MOF), the asset-liability ratio of the state-owned
enterprises increased to 66.33% in Jan. - June 2016. The liability has
increased to RMB83.5 trillion, up 5.7% compared with that of the end of last
year.
Influenced by the expansion of liability,
the assets of China’s state-owned enterprises have increased RMB6.7 trillion to
RMB125.95 trillion. However, the profits created by the expanded assets and
liabilities were falling.
According to the MOF, the profits of state-owned
enterprises decreased 8.5 percentage points in Jan.-June YoY, among which the
central enterprises declined 9%, higher than that of the local state-owned
enterprises which declined 7.1%.
The profit reduction in the state-owned
enterprises was perplexed by the sluggish increase of the operating revenue. The
operating revenue of China’s state-owned enterprises slightly reduced 0.1% YoY in
H1 2016, while the expense of the enterprises increased in a rate of nearly 5%.
Apparently, this situation would result in losses in the enterprises.
The good news lies in the improvement on
the profits increase in Jan. - June compared to that in Jan. - May. Besides,
the decrease of the operating revenue in Jan.- June is also lower than that of
Jan.-May. Therefore we can conclude that the sales of enterprises are
recovering.
The improvement on the profits of
state-owned enterprises was largely benefited from the stabilized ex-works prices
of industrial products. According to the National Bureau of Statistics (NBS),
the purchase prices of industrial products decreased 4.8% YoY in H1; on June,
the price reduced 3.4% YoY and increased 0.2% MoM. All those statistics have
shown a favorable environment for the improvement on the revenues of
enterprises.
In addition, with the stimulation of enhanced
fiscal policies and the acceleration of the investment on the field of
infrastructure, the products prices, including the price of the construction
materials, has gradually reverted, which also benefits the profiting of
enterprises. The products prices, including the prices of coal, steel, and
cement, have all reverted and increased in varying degrees in the end of June.
From the perspective of industry, those
state-owned enterprises with the most obvious improvement belong to the
industries of medicine, coal, and building. The steel industry, with a slight
increase in the price, was encumbered by the slow process of de-capacity, and
therefore enjoyed very limited space for the profit improvement, and so did the
profits of the relevant state-owned enterprises.
*The article is edited and translated by
CCM. The original version comes from Jiemian.com.
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