Event: from January to November, the total profits of national industrial enterprises above Designated Size accumulated 38.0% year-on-year, an increase of 41.3% over the same period in 2019, The two-year compound growth rate was 18.9% (the previous value was 19.7%); in November, the profits of Industrial Enterprises above designated size increased by 9.0% (the previous value was 24.6%). Core view: the correction effect of real estate and production restriction appeared, and the double squeeze (upstream to downstream and state-owned enterprises to private enterprises) weakened as scheduled.
1. Price factors continued to support corporate profits, but the margin was weakened, and the monthly profit fell for the first time month on month in November
From January to November, the two-year compound growth rate of profits of Industrial Enterprises above designated size decreased by 0.8 percentage points to 18.9%. In terms of weight, price and profit margin: the two-year compound growth rate of industrial added value and PPI from January to November was 6.1% and 2.8% respectively, and the previous value was 6.3% and 2.5%, indicating that although PPI has peaked and dropped year-on-year in a single month, the absolute price is still high, and the price factor still supports revenue and profit; From January to November, the revenue profit margin decreased by 0.03 percentage points to 6.98%, mainly due to the decline in the price of some raw materials, which led to the decline in the profit margin of relevant industries.
In November, the single month profit decreased by 15.6 percentage points year-on-year to 9.0%, and the two-year compound growth rate decreased by 2.3 percentage points to 12.2%; Decreased by 1.6% month on month, For the first time since the data were available, there was a negative month on month increase in November (according to the seasonal law, November is the “big month” of enterprise profits). From the perspective of attribution, the strength of supply guarantee policy, the decline in the prices of some raw materials and the decline in the growth rate of upstream profits are the main drag. > looking back and continuing the previous judgment, the short-term enterprise profits may fall slightly. Pay attention to three disturbances: export toughness (focus on the evolution of the epidemic situation in the short term, especially the impact and progress of the new variant of Omicron), the high PPI (the center may be about 3.5% in 2022, and it may still be high in the first half of the year) is expected to support the profits; the downward pressure of the economy may drag down the profits of enterprises.
2. The profit squeeze from the upstream to the middle and lower reaches has eased, and the proportion of upstream profits may remain high in the short term due to three factors
Upstream from January to November The profit proportion of (mining + raw materials) fell by 0.06 percentage points to 52.36%, of which the upstream profit proportion in a single month in November decreased by 8.5 percentage points to 51.8%, indicating that the upstream squeeze on the profits of the middle and lower reaches has improved with the force of the policy of ensuring supply and stabilizing prices. Specifically, the profit proportion of the mining industry increased by 0.4 percentage points to 12.4% from January to November, which was significantly narrowed compared with the previous value; The proportion of raw material manufacturing profits fell by 0.5 percentage points to 39.9%; The proportion of midstream equipment manufacturing profits rose by 0.5 percentage points to 28.7%; The proportion of downstream consumer manufacturing profits rose slightly by 0.1 percentage points to 14.3%, the first rise since February this year; The proportion of utility profits continued to fall by 0.6 percentage points to 4.6%.
In the future, it will continue to prompt that the policies of limiting production and correcting deviations and ensuring supply will continue to be implemented, the bulk price will continue to fall, the upstream squeeze on the profits of the middle and lower reaches may be weakened, and the proportion of upstream profits in the follow-up may gradually fall; However, considering the impact of factors such as the locking price of the long-term association, the increase of output and the upward movement of the bulk price center, the proportion of short-term upstream profits may still be in the top range (about 50%).
3. The profit differentiation of subdivided industries has converged, and the effect of real estate and production restriction correction policies has appeared
From January to November, the two-year compound growth rates of mining, manufacturing and utility profits were 38.5%, 19.5% and – 10.7% respectively, and the previous values were 35.3%, 19.8% and – 5.3% respectively. The decline in utility profits further expanded.
From the perspective of industry segmentation: if it is disassembled according to the three aspects of volume, price and profit margin, the profit growth rate of upstream industries is still high, but the marginal volume, price and profit margin fall simultaneously; The profit growth rate of the middle and downstream industries is still low, but the volume, price and profit margin have been repaired. 1) In absolute terms, the industries with two-year compound profit growth of more than 20% from January to November are still concentrated in coal mining and beneficiation, black, nonferrous metals, chemical industry, chemical fiber, etc. benefiting from the upward PPI; However, from the marginal point of view, most of the volume, price and profit margin of black, nonferrous metals and chemical industry fell in November, driving the profit growth rate of relevant industries to fall significantly. 2) The sales volume excluding price factors can better reflect the real changes in supply and demand. In November, the growth rate of sales volume in 17 of the 39 subdivided industries fell, slightly better than that in October. Among them, the industries with more sales volume are concentrated in the middle and lower reaches, Specifically, it includes: chemical fiber in the upstream (benefiting from the epidemic and export), rubber and plastics (benefiting from the epidemic and the improvement of core shortage), automobiles, general equipment, special equipment, electronic communication, instruments and meters in the midstream (all benefiting from the improvement of core shortage), comprehensive utilization of waste resources (benefiting from double carbon), and furniture manufacturing in the downstream (benefiting from real estate rectification and export), tobacco products, etc.; industries with a large decline in sales are mainly concentrated in upstream coal mining, oil and gas mining, black, nonferrous metals, etc (both suffered from the economic downturn). 3) other industries worthy of attention include: after the rise and fall of coal power price expanded to 20%, the revenue of power and heat industry continued to improve, but the quantity and profit still fell, indicating that the coal price is still high, and the power plant “can’t increase revenue” or even “the more you make, the more you get” ； In November, the sales volume and revenue growth of the furniture manufacturing industry increased by 9.1 and 9.3 percentage points respectively, which can be mutually confirmed with the improvement of real estate sales, indicating that the correction effect of real estate has appeared.
4. Three factors lead to a sharp rebound in inventory growth again, which may lead to active destocking in the future; Continuation and differentiation of different industrial chains
Overall, from January to November, the growth rate of finished product inventory of Enterprises above Designated Size rose by 1.6 percentage points to 17.9%, a new high since the beginning of 2012. There are three main reasons for the sharp increase of enterprise inventory in November: first, the inventory of coal and other bulk commodities increased rapidly with the support of policies; Second, the high level of PPI pushed up the apparent inventory reading; Third, the enterprise itself still has the willingness to replenish the inventory. The evidence lies in the marginal recovery of PMI raw material inventory and the continuous recovery of actual inventory excluding price factors. In the future, considering the economic downturn, weakening demand and the gradual decline of PPI, enterprises may gradually take the initiative to go to the warehouse.
According to the industrial chain, the coal inventory has returned to the normal level in previous years, the investment chain continues to go to the warehouse, the automobile in the consumption chain begins to replenish the warehouse, and the replenishment of the textile and clothing industry chain is still slow. According to the high-frequency data, with the support of the supply guarantee policy, the inventory of coal ports and power plants has returned to or even exceeded the normal level in the same period of previous years, and the follow-up supply guarantee measures may be gradually withdrawn; Asphalt, rebar, PVC (mainly used for pipes) and copper in the infrastructure and real estate industry chain continue to go to the warehouse; in the consumption chain, due to the improvement of core shortage, the margin of vehicle inventory rebounds, and may take the initiative to replenish the warehouse later, and the natural rubber in the automobile industry chain also begins to replenish the warehouse; the replenishment speed of PP (mainly used for fiber products) and polyester filament in the textile and clothing industry chain is still slow.
5. The squeeze of state-owned enterprises on the profits of private enterprises improved as scheduled; Corporate leverage rose slightly, and the difference between private and state-owned enterprises converged significantly
Profit growth rate: from January to November, the two-year compound growth rate of profits of state-owned enterprises and private enterprises was 25.6% and 14.1% respectively, and the previous value was 26.9% and 14.9%. The gap between the two narrowed, indicating that the squeeze of state-owned enterprises on the profits of private enterprises has improved. Looking back, continuing the previous judgment, given that the prices of bulk commodities such as coal have dropped significantly, the squeeze of state-owned enterprises on the profits of private enterprises may further improve.
Leverage ratio: in November, the asset liability ratio of industrial enterprises increased by 0.1 percentage point to 56.4%. In terms of ownership, the asset liability ratio of state-owned enterprises increased by 0.2 percentage points to 57.3%, and the asset liability ratio of private enterprises decreased by 0.2 percentage points to 58.1%; The difference between private and state-owned enterprises converged to 0.8 percentage points. However, in absolute terms, the leverage of private enterprises is still significantly higher than that before the epidemic, suggesting that we should continue to focus on the deleveraging process of private enterprises.
6. Looking forward to 2022, focus on the narrowing of the ppi-cpi scissors gap and the joint efforts of new and old infrastructure: 1) based on the experience of narrowing the ppi-cpi scissors gap in the past five rounds, after the scissors gap peaked, the upstream profit margin transmitted to the middle and lower reaches, and the profit performance of downstream consumer goods manufacturing, agriculture, forestry, animal husbandry and fishery industries is often better than that of upstream cycle industries; 2) In 2022, the joint efforts of new and old infrastructure are expected to enhance the toughness of the profits of old infrastructure related industries (steel, nonferrous metals, glass, etc.) and increase the elasticity of the profits of new infrastructure related industries (photovoltaic equipment, 5g communication base stations, etc.).
Risk tip: the epidemic situation, China US relations, policy strength and other unexpected changes.
