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November 3, 2009

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Home » Business » Economy

Profit falls by smaller margin

THE fall in net profit of companies listed on the Chinese mainland showed an improvement in the first three quarters of this year following a stronger recovery in the economy.

Net income of 1,681 listed firms dropped only 2 percent from a year earlier to 783 billion yuan (US$114.64 billion) through September, against a 15 percent decline in the first half, according to the Shanghai and Shenzhen stock exchanges.

Ten major firms from the banking, energy and insurance sectors contributed 471 billion yuan to the combined profit of all listed firms, accounting for 60.14 percent.

The Industrial and Commercial Bank of China had 99.91 billion yuan in profit, followed by China Construction Bank, PetroChina, the Bank of China and Sinopec.

The steel and cement sectors also grew rapidly in the nine-month period, boosted by the country's 4 trillion yuan stimulus measures that fueled construction of railways, roads and infrastructure.

Revenue for the listed firms totaled 8.1 trillion yuan through September, a drop of 6 percent from a year earlier. The revenue decline outperformed the profit fall, indicating listed firms had lower costs in the period.

In the third quarter, profit for listed firms rose 26 percent from a year earlier to 288.82 billion yuan, with 62 percent of them posting an annual growth in net income.

"We raised the estimation for the whole year profit growth to 22.5 percent in anticipation that fourth-quarter profit will grow significantly with the improved macro economy and last year's low base," said China Merchants Securities in a report.

China's economy grew 8.9 percent in the third quarter, after a 7.9 percent rise in the second quarter and a 6.1 percent gain in the first quarter.


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