Key investment points:
This report comments on the profit data of Chinese industrial enterprises published every month.
The monthly growth rate of profits of industrial enterprises rose to a high point in the year
From January to October, the profits of Industrial Enterprises above designated size were 42.2% year-on-year, and the two-year compound growth rate was 19.7%, up 0.9 percentage points. In October, the two-year compound growth rate of industrial enterprise profits in a single month was 26.4%, rising to the highest level since this year.
In October, with the implementation of the national supply guarantee policy, the supply of upstream resources such as coal recovered significantly, driving the profits of some upstream industries in mining and manufacturing to continue to rise, resulting in a significant recovery in the profit growth of industrial enterprises.
Profits continue to concentrate upstream
From January to October, the two-year compound growth rate of mining profits was 35.0%, continuing to rise sharply by 6.8 percentage points; Manufacturing profits grew at a compound growth rate of 20.3% over the past two years, rising slightly by 0.1 percentage points; The two-year compound growth rate of power, heat and gas industry was – 7.8%, with a decline of 1.1 percentage points. The profits are further concentrated in the upstream, and the profit promotion speed of the mining industry is accelerated; The profits of power, heat and gas industry continued to decline significantly; The overall profit growth of the manufacturing industry was basically flat.
The profits of upstream and downstream industries of manufacturing industry showed a trend of further differentiation: upstream industries such as ferrous metal, nonferrous metal smelting and rolling processing industry, chemical raw materials and chemical products manufacturing industry continued to rise in October, and the two-year compound growth rate was generally more than 40%; The profit growth of downstream industries such as general equipment, special equipment manufacturing, automobile manufacturing, electrical machinery and equipment manufacturing and computer communication equipment manufacturing decreased.
Profitability improved slightly and inventory growth picked up
From January to October, the two-year compound growth rate of operating revenue was 9.7%, the two-year compound growth rate of operating cost was 9.4%, and the profit margin of operating revenue was 7.01%, up 0.05 percentage points month on month. The sales of industrial enterprises remained unchanged from the previous month, and the profitability of enterprises recovered.
At the end of October, the turnover days of finished goods inventory were 17.4 days, an increase of 0.1 days month on month; The growth rate of finished goods inventory increased by 2.6 percentage points to 16.3%. In October, the industrial production side was repaired, and the demand side was basically the same as that of the previous month, resulting in a rebound in the growth rate of finished product inventory.
Profit growth is expected to fall slightly in November
In November, the prices of industrial products generally fell; In terms of industrial production, the supply guarantee policy continued to be deeply implemented in November, but due to factors such as dual control of energy consumption, blast furnace operating rate and other indicators further fell, and the industrial growth rate may be roughly the same as that in October. It is expected that the profit growth of industrial enterprises will slow down slightly from January to November, and the upstream profit growth may fall significantly.
Risk statement
The economy has changed more than expected.
