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(Yicai Global) Dec. 27 -- Profit growth at Chinese industrial firms slowed last month, after two straight months of rapid gains, as raw material costs fell and earnings performance along the supply chain evened out.
Profits at industrial companies with at least CNY20 million (USD3.1 million) in annual turnover rose 9 percent in November to CNY805.96 billion (USD126.5 billion) from a year earlier, according to data the National Bureau of Statistics published today. The gain was 24.6 percent in October and 16.3 percent in September.
Some commodity prices declined last month and the performance gap between upstream and downstream suppliers narrowed, said Zhu Hong, a senior statistician at the NBS, said in a statement accompanying the data release. Miners and raw materials producers contributed less to overall profit growth, while equipment and consumer goods makers played a bigger part, he said.
For the January to November period, profit growth soared 38 percent to CNY7.98 trillion (USD1.25 trillion) from a year ago, slowing for the ninth month in a row.
Profits at consumer goods companies jumped 13.6 percent in November, rising more quickly for a second straight month, after a 3.6 percent increase in October. Clothing and food led the gains.
Profit at equipment makers rose 0.8 percent, after a 7.5 percent drop the month before. Despite a 6.4 percent and 6.2 percent fall at vehicle makers and general equipment producers, because of easing chip shortages and increasing demand, that was better than the month-earlier plunges of 28.5 percent and 15.7 percent, Zhu said.
Despite the upstream-downstream rebalancing, cost pressures remain high and the pick-up in profits among consumer-facing businesses needs to improve further, Zhu added. China should ensure price stability and supply while adjusting policies to support manufacturers, especially small and mid-sized firms, Zhu said.
Next year average profit growth at industrial firms is likely to be lower than this year, but probably not less than 10 percent, as the government has proposed new cuts to taxes and fees, Zheng Houcheng, director of Yingda Securities Research Institute, told Yicai Global.
Editor: Emmi Laine, Xiao Yi