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State-owned companies' profits grow slower
By Wang Yanlin |
November 19, 2010, Friday
|
Online Edition
Online Edition
NET earnings of Chinese state-owned enterprises expanded 44.8 percent from a year earlier to 1.6 trillion yuan (US$240.6 billion) in the first 10 months, the Ministry of Finance said today.
The pace moderated a bit from the increase of 46 percent in the first three quarters but maintained a strong growth momentum.
The stable expansion was a reflection of China's fast-expanding economy, but analysts warned that rising prices may eat into companies' earnings.
"Chinese SOEs are a major beneficiary of the country's stimulus measures," said Li Maoyu, an analyst at the Changjiang Securities Co. "But with the fading effect of stimulus and tightening monetary policies, state-owned companies may grow less quickly in the near future."
The weaker performance in October was also a result of higher production costs, said Dong Xian'an, an analyst at the Industrial Securities.
"Much more expensive raw materials have eaten into, and will continue to erode companies' profit margin," Dong said.
In October, China's Producer Price Index, a factory-gate measure of inflation, swelled 5 percent from a year earlier, faster than the pace of 4.3 percent in September.
Among the component indices, price of raw materials for manufacturing gained 8.5 percent.
The pace moderated a bit from the increase of 46 percent in the first three quarters but maintained a strong growth momentum.
The stable expansion was a reflection of China's fast-expanding economy, but analysts warned that rising prices may eat into companies' earnings.
"Chinese SOEs are a major beneficiary of the country's stimulus measures," said Li Maoyu, an analyst at the Changjiang Securities Co. "But with the fading effect of stimulus and tightening monetary policies, state-owned companies may grow less quickly in the near future."
The weaker performance in October was also a result of higher production costs, said Dong Xian'an, an analyst at the Industrial Securities.
"Much more expensive raw materials have eaten into, and will continue to erode companies' profit margin," Dong said.
In October, China's Producer Price Index, a factory-gate measure of inflation, swelled 5 percent from a year earlier, faster than the pace of 4.3 percent in September.
Among the component indices, price of raw materials for manufacturing gained 8.5 percent.
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