Chinese industrial firms' profits down 8% by July

China's sizeable industrial firms still posted a 8.1% on-year decline in their gross profits for the first seven months of 2020, though the drop narrowed by 4.7 percentage points from that in the first half of 2020, according to the latest release by the country's National Bureau of Statistics (NBS) on Thursday.

The narrowing in decline on year by the end of July was mainly due to the further improvement in the performance in July when gross margin of all the sizeable enterprises gained 19.6% on year to Yuan 589.5 billion against the 11.5% on-year gain for June.

Among the total of Yuan 3.1 trillion ($450 billion) over January-July, the breakdown by the ownership showed that the state-owned companies posted the sharpest decline of 23.5% on year to Yuan 783.8 billion, while that of the privately-owned companies fell 5.3% on year to Yuan 888.3 billion in total, according to the NBS data.

The definition of the "sizeable enterprises" varies by industrial sectors and is based on the revenues, according to NBS' explanation.

Over January-July, the breakdown by industrial sector showed that 12 of the 41 posted on-year gains in gross profits, among which the sector of computer, telecommunication and other electronic devices posted the highest gain of 28.7% on year to Yuan 288.3 billion, also the one with the biggest share of the country's total gross profits, and the ferrous mining ranked the second highest in growth, up 24.3% on year to Yuan 16.5 billion, according to the NBS table.

The country's steelmaking and processing sector posted a 32% on-year decline in gross profit to Yuan 110.7 billion, and the nonferrous smelting and processing sector down 12.7% on year in its gross profit to Yuan 53.1 billion, the data showed.

The few sectors listed by the NBS in the release regarding the profitability showed that China's mining sector in general posted the highest margin at 9.37% over the first seven months, much higher than the national average of 5.63% for all, though its debt-asset ratio was also at the highest of 59.3% among the few against the country's 56.7% by the end of July, with the countrywide ratio being unchanged from the end of June, Mysteel Global noted.

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.