Chinese central SOEs profit up 19.4 pct in Q1

China's central state-owned enterprises (SOEs) saw their net profits surge 19.4 percent in the first quarter of the year, China's top SOE regulator said Monday.

Workers manufacture cars in a factory of FAW Group in Changchun, Jilin Province. [File photo: IC]

The total operating revenue of central SOEs increased by 8.7 percent year on year to 6.4 trillion yuan (about 1.02 trillion U.S. dollars) in the first quarter, according to Peng Huagang, spokesperson for the State-owned Assets Supervision and Administration Commission.

In March, central SOEs in sectors of electricity, coal, and machinery led SOE revenue growth to 2.4 trillion yuan, and monthly profit reached a new high by increasing 17.8 percent year-on-year to 169.8 billion yuan, he said.

The robust growth in profit is attributed to the steady development of China's economy, deepening supply-side reform, and corporate shake-ups that galvanize competitiveness, Peng said, calling these factors long-term stimulants for the central SOEs.

"Key economic gauges point to a steady and improving Chinese economy," he said, citing a 12.2-percent year-on-year increase in electricity sales, a leading economic indicator, in the first quarter.

China's manufacturing purchasing managers' index, an indicator of manufacturing activity, posted an annual average of 51.6 percent in 2017, 1.3 percentage points higher than 2016, he added. A reading of above 50 indicates expansion.

"Strong momentum and confidence in the economy paves the way for dynamic growth in production, sales, and profits of central SOEs," he said.

Cutting overcapacity has contributed to the turnaround of steel-related central SOEs, which posted a 129.8 percent year-on-year increase in profit in the first quarter, he added.

Central SOEs have combined structural reform and more investment in innovation to cultivate strategic new industries as growth engines. "We are confident and determined in pushing forward the consistent, healthy, and high-quality development of central SOEs," Peng said.