Key investment points
In the first two months of this year, the profit growth rate of industrial enterprises rebounded slightly year-on-year. In terms of industries, driven by the sharp rise in the price of energy products, the profit growth rate of mining industry and upstream raw material manufacturing industry both strengthened, driving the profit growth rate of industrial enterprises to rise. However, compared with the growth rate in December last year excluding the base effect, the growth rate in the first two months of this year actually fell significantly, which is mainly due to the pressure of the rising prices in the upstream on the profits of the middle and downstream industries. From the perspective of revenue structure, the growth rate of industrial added value increased in the first two months of this year, the contribution of "volume" to profit growth further increased, the decline of PPI growth rate was relatively slow and remained high, and the support of "price" was still tenacious. However, the profit margin of revenue decreased significantly, and the cost per 100 yuan of revenue also increased year-on-year, reflecting the significant increase of cost side pressure, and the cost growth rate reached as much as three times the profit growth, This has brought greater operating pressure to industrial enterprises, especially those in the middle and lower reaches, let alone the spread of the local epidemic has not subsided. We believe that in the short term, it is imperative to alleviate the pressure of rising costs, but focusing on promoting the recovery of the demand side is the fundamental strategy to get rid of the business dilemma.
Profit growth rose slightly. In the case of a higher base in the same period last year, the profit growth rate of industrial enterprises in the first two months of 2022 recorded a year-on-year growth rate of 5%, 0.8 percentage points higher than that in December last year, but a significant decline of 6.9 percentage points compared with the growth rate in December last year calculated by the two-year average annual growth rate. In the context of higher energy prices, the raw material industry has made a great contribution to the profit growth of industrial enterprises, but the profit growth rate of midstream equipment manufacturing and downstream consumer goods industries has both decreased, which has dragged down the profit growth of industrial enterprises, and the revenue profit margin has also declined.
Profits among industries are significantly differentiated. In terms of industries, from January to February, among the 41 major industrial industries, the total profits of 22 industries increased or decreased year-on-year, and 19 industries decreased. Specifically, the profit performance of various industries, driven by the continuous rise in crude oil prices and the higher year-on-year increase in coal prices, the profit growth of the mining industry remained strong, and the profit growth of the upstream raw material manufacturing industry strengthened again, which increased the driving effect on the profit growth of industrial enterprises. The profit growth rate of midstream equipment manufacturing industry and downstream consumer goods manufacturing industry both fell. However, driven by factors such as consumption boosted by the Spring Festival, the profits of some basic consumer goods industries such as wine and beverage, textile and food manufacturing achieved rapid growth.
Revenue growth rebounded. In the first two months of 2022, the operating revenue of Industrial Enterprises above Designated Size recorded a year-on-year growth rate of 13.9%, up 1.6 percentage points from the growth rate in December last year, and up 3.5 percentage points from the growth rate in December last year calculated by the average annual growth rate of two years. In the first two months of this year, the cost per 100 yuan of operating revenue fell back to 92.18 yuan, but the year-on-year change from decrease to increase means that the pressure on the cost side has increased significantly, of which the cost is 0.17 yuan higher than that in December last year and the cost is 0.32 yuan lower than that in December last year. From the perspective of revenue profit margin, the operating revenue profit margin of industrial enterprises fell to 6% in the first two months of this year, which was significantly lower than that in the same period last year, reflecting the great operating pressure of enterprises. From the perspective of specific industries, the profit margin of the mining industry was significantly higher than that at the end of last year, while the profit margins of the raw material industry, the midstream equipment manufacturing industry and the downstream consumer goods manufacturing industry all fell.
Inventory continues to be de. At the end of February, the growth rate of finished product inventory of industrial enterprises continued to decline to 16.8%. In the first two months of this year, the inventory sales ratio of industrial enterprises decreased significantly to 27.7%, but it was still higher than the level in the same period last year. At the end of February, the inventory turnover days significantly rebounded to 19.8 days. Since 2022, the growth rate of PPI has declined for two consecutive months. Under the background of weak overall downstream demand, the inventory of industrial enterprises has continued to decline and entered the stage of active destocking.
Risk tip: policy changes, economic recovery is less than expected.
