China's major industrial companies posted faster profit growth in May, supported by larger sales and better investment returns, the National Bureau of Statistics said yesterday.
Industrial companies reported profits totaling 626 billion yuan ( billion) in May, up 16.7 percent year on year — a growth 2.7 percentage points faster than April.
The bureau tracks companies with annual revenue of more than 20 million yuan.
The bureau's statistician He Ping attributed the acceleration to faster growth in sales, improved investment returns, faster increase of non-business income, a low base last year, and better profits in the power and tobacco industries.
These factors lifted industrial profits despite stable production and weaker price increases, He said.
The bureau's data showed 38 of the 41 surveyed industries reported growth in profits, led by the coal and metal industries.
January-May total profits rose 22.7 percent to 2.9 trillion yuan, more than three times the pace in the same period of last year but slower than the 24.4 percent increase for the first four months of this year.
Profits at China's state-owned enterprises were up 53.3 percent to 652 billion yuan in the January-May period, compared with a 58.7 percent rise in the first four months.
Private companies reported profits grew 14 percent to 963.1 billion yuan in the first five months, compared with 14.3 percent in the first four months.
CITIC Securities expects industrial profit growth to slow to 12 percent year on year in the second half amid slower price increases and stable production growth. That compares with the 8.5 percent full-year increase in 2016.
The industrial sector, which accounts for about a third of GDP, started to pick up last year after profits declined in 2015, helped by government efforts to cut overcapacity and a recovery of the property sector.
Major activity indicators, including industrial output, retail sales and trade, showed cooler growth in the second quarter but the May data beat expectations to reveal sound momentum in the economy.