BEIJING, July 19 (Xinhua) -- China A-share market-listed companies are expected to embrace gradual slowdown of profit growth in the third quarter of this year, reported Xinhua-run Xinhua Finance citing a research report released by China Merchants Securities on July 16.
The securities broker attributed the forecasted deceleration of profit growth, which may extend to the next year, to a likely peaking in A-share firms' this round of profit cycle alongside their releasing of semi-annual financial results.
For the first half of 2021, China's A-share market-listed companies are anticipated to have maintained relatively high profit growth driven by multiple factors.
As China Merchants Securities held, the relatively high year-on-year increase of China's producer price index (PPI) from January to June has resulted in product price surges for many industries such as those closely linked with China's economic growth cycle, semi-conductor industry, upstream and middle stream of new energy vehicle industry, shipping and container industry and paper making industry, all of which enjoyed continuously improved profits thanks also to improved demand.
For export-oriented A-share companies, China's resilient exports in the second quarter of this year foretell further expansion of their sales in overseas markets where demand significantly outran supply. For instance, A-share companies in machinery, small home appliances, auto parts and furniture sectors have attached importance to exploration of overseas markets and are likely to see fast growths in overseas sales in the first half of this year.
What's more, the securities broker said that China A-share companies faced in their semi-annual financial reports still controllable costs and expenses pressures as from January to May, the proportion of costs and, in particular, expenses in per 100 yuan of incomes of China's industrial enterprises stayed at relatively low levels, hinting that they did not run out of a period featured by enjoying dividends from low expenses. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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