China's industrial profits up 15.7% in Jan-Aug, maintaining double-digit growth
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According to data from China's National Bureau of Statistics released on September 28, industrial enterprises above a designated size saw their profits rise 15.7% year-on-year in the first eight months of 2021, maintaining double-digit growth since the start of the year. This was driven by steady industrial production and expanding industrial product price increases. Revenue grew 6.6% over the same period. By sector, mining profits surged 35.1%, manufacturing rose 17.4%, while utilities (electricity, heat, gas, and water) fell 12.0%. In August alone, profit growth slowed to 4.2% due to a high base last year. Gross profit, calculated as revenue minus operating costs, grew 7.5% in August, accelerating 1.9 percentage points from July. A research institution noted that the current policy environment is positive, external risks are limited, liquidity remains loose, and the economic fundamentals are recovering. It recommended that investors focus on technology growth, selected cyclical, and consumer sectors, adding that historically, strong sectors before a holiday tend to continue afterward. The report also included a risk disclaimer advising caution.
Source report
As of 9:42 a.m. on September 28, the market experienced volatile adjustments, with the CSI 300 ETF tracking index falling by 1.15%. Among its constituent stocks, Huadong Medicine rose by 3.26%, Rongsheng Petrochemical increased by 3.05%, and SDIC Power climbed by 2.29%.
Macroeconomic Data Highlights
According to data from the National Bureau of Statistics, from January to August:
- Driven by steady industrial production growth and an expanded scope of industrial product price increases, revenue from industrial enterprises above the designated size rose by 6.6% year-on-year.
- This contributed to a 15.7% year-on-year increase in profits for these enterprises, maintaining double-digit cumulative growth so far this year.
Breakdown by Sector
- Mining: Profit growth of 35.1%
- Manufacturing: Profit growth of 17.4%
- Electricity, Heat, Gas, and Water Production and Supply: Profit decline of 12.0%
In August, due to a high base in the same period last year, the profit growth rate of industrial enterprises above the designated size moderated to 4.2% year-on-year. However, gross profit—calculated as revenue minus operating costs—grew by 7.5%, accelerating by 1.9 percentage points from the previous month.
Analyst Commentary
Research institutions note that the current policy environment remains supportive, external risks are limited, liquidity continues to be accommodative, and the economic fundamentals are on a sustained recovery path. Sectors such as technology-driven growth, selected cyclical industries, and consumer goods are seen as having allocation advantages. Historical data suggests that sectors performing strongly before a holiday tend to maintain their momentum afterward. Analysts recommend positioning during market pullbacks.
Risk Disclaimer: The above information is for reference only and does not constitute investment advice. Investing in the market carries risks. Please exercise caution.
Source
每日经济新闻Eastern
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China’s industrial profits rise 15.7% in Jan–Aug, led by high-tech and raw materials