(Yicai Global) April 27 -- Profits at China’s industrial enterprises above designated size maintained a double-digit growth in the first quarter this year at 11.6 percent annually despite the February Chinese New Year holiday, which led to a 4.5 percentage point deceleration in product price growth in March.
The overall profit margin of industrial enterprises was 6.18 percent for the quarter, an increase of 0.11 percentage point compared to last year, data from the National Bureau of Statistics shows, indicating stronger profitability among the firms.
The manufacturing sector’s contribution to total profit reaching 83.9 percent in March, an increase of 0.3 percentage point from the first two months. Total profit generated by emerging industrial sectors posted 10.7 percent growth, maintaining strong momentum.
The first quarter saw a decline in operating cost and a reduction in the leverage ratio of China’s industrial enterprises. Firms incurred costs of CNY92.61 for every CNY100 earned, representing a decrease of CNY0.13 on an annual basis. The debt-to-asset ratio among industrial enterprises was 56.4 percent as of the end of March, a fall of 0.8 percentage point from a year earlier.
In March alone, industrial profit growth was 3.1 percent annually, slumping 13 percentage points compared to the growth rate for the first two months. The slowdown was mainly attributed to a smaller actual number of days for production and operation compared to a year ago, due to the Chinese New Year holiday falling later this year, some enterprises also did not resume production as early as last year.
At the same time, the increase in the prices of industrial products also declined in March. The Producer Price Index rose 3.1 percent compared to last year, 0.9 percentage point lower than the increase seen in January and February, and the Purchasing Price Index rose 3.7 percent annually, 1.1 percentage points lower than the increase in January to February.
Editor: William Clegg