Con­sumer-driven firms forge ahead in H1

China Daily (Canada) - - LIFE - ByWUYIYAO in Shang­hai wuyiyao@chi­nadaily.com.cn

A-share listed com­pa­nies with con­sump­tion-driven busi­ness werea­mongthe most prof­itable, while those suf­fer­ing from over­ca­pac­ity and shrink­ing mar­ket de­mands have been strug­gling with sig­nif­i­cant losses, ac­cord­ing to anal­y­sis of the lat­est fi­nan­cial in­terim re­ports of the 2,500 A-share listed com­pa­nies.

Some 60 per­cent of these com­pa­nies which have re­leased in­terim re­ports said their prof­its grew year-onyear, while some 950 com­pa­nies, or 37 per­cent, said their prof­its de­clined in the first half of 2016, ac­cord­ing to Shang­hai-based Wind In­for­ma­tion Tech­nol­ogy Ltd, a Top 5 most prof­itable com­pa­nies fi­nan­cial in­for­ma­tion ser­vices provider.

Sinopec Group re­ported net profit of 19.3 bil­lion yuan ($2.89 bil­lion), which ranks the top among all the A-share com­pa­nies.

Al­though the com­pany has suf­fered from de­clin­ing crude oil price, the com­pany’s in­come and profit were sta­ble with help from its healthy re­fin­ing busi­ness and from gaso­line sales.

Liquor maker Kwe­i­chow Moutai Co, pork and poul­try farm­ing op­er­a­tor Guangzhou Wens Co Ltd and do­mes­tic ap­pli­ances maker Gree Elec­tric Ap­pli­ances Inc are among the top 10 group with the most prof­its in the first half of 2016.

China COSCO Hold­ings Co, Asia’s big­gest con­tainer ship­per, prof­its Yun Tian Hua Group Co Ltd, one of China’s big­gest fer­til­izer sup­pli­ers and ship builder Sainty Marine are among the top 10 com­pa­nies with the most losses.

An­a­lysts said that com­pa­nies with core busi­nesses meet­ing in­creas­ing de­mand, amid China’s sup­ply-side re­forms and up­graded con­sump­tion, were more likely to grow in a sus­tain­able way and keep prof­itable at a sta­ble level.

“Com­pa­nies showed di­verg­ing per­for­mances re­flected in their in­terim re­ports and we can see that prof­its are highly re­lated to mar­ket de­mand and com­pa­nies’ op­er­at­ing ca­pa­bil­i­ties,” said a re­search note from Shen­wan Hongyuan Se­cu­ri­ties.

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