Wobbly world economy, slower domestic growth hurt results
The Chinese Academy of Social Sciences (CASS) released an analysis of the first-half financial results of listed companies, saying their revenue and net profit declined by unusual amounts, the China Securities Journal reported Monday.
The report cited the increasing uncertainty of the global economic recovery and the slowdown of domestic economic growth, and it forecast continued weakness in the second half.
The CASS, the top central government think tank, analyzed 2,400 non-financial companies that got listed on the A-share market before 2010.
Companies on the ChiNext board, a NASDAQ-style index tailored for growth enterprises, maintained positive momentum over this period, which showed that companies with high innovative ability could resist the domestic economic downturn, the study said.
Corporate revenue totaled 10.3 trillion yuan ($1.62 trillion) in the first half, a 5.2 percent decline year-on-year. Net profit fell 2.6 percent to 536.74 billion yuan, the report said.
Profits generated via investment stood at 131.93 billion yuan, a 35 percent increase year-on-year, which accounted for 19.3 percent of the overall profit. Profits from core operations totaled 531.75 billion yuan, a 10.9 percent decrease from the same period last year, the report said.
According to the report, non-operating income reached 60 billion yuan, a 16.9 percent increase from the same period a year earlier, accounting for 8.8 percent of the overall profit. The profit of non-core business services approached 152.69 billion yuan, taking up 22.3 percent of the total profit.
Profits were hurt by higher management costs and tax payments, set against the fall of revenues, according to the report. It also said that gains in the domestic stock market and higher government subsidies slowed the pace of the decline in profits.
Separately, the Ministry of Finance said on Monday that profits at State-owned enterprises (SOEs) fell 6.6 percent in the first eight months of 2015 from a year earlier, quickening from a 2.3 percent drop in the January-July period. The SOEs' profits, excluding financial firms, totaled 1.6 trillion yuan in the January-August period, the ministry said.
Revenues of SOEs totaled 29.2 trillion yuan in the first eight months, down 5.9 percent from a year ago, according to the ministry.
Firms controlled by local governments reported a 1 percent drop in profits in the first eight months, which compared with a 3.6 percent rise in profits in the January-July period. Profits made by firms in the transportation, electronics and chemical sectors rose sharply, while earnings of firms in the petrochemical, oil and construction materials industries dropped, it said.
Companies in the steel, coal and non-ferrous metal sectors remained in the red, it added.
