The profit growth rate of industrial enterprises in November was the 2nd highest

From the previous month's year-on-year decline of 9.9% to the current month's year-on-year growth of 5.4%. In November, the growth rate of profits of Industrial Enterprises above Designated Size nationwide rebounded significantly. On December 27, the National Bureau of Statistics announced that in November, the total profits of Industrial Enterprises above Designated Size nationwide reached 593.91 billion yuan, an increase of 5.4% year-on-year. This growth rate also became the second highest in each month of the year, only lower than the 13.9% in March this year. Driven by the stronger data in November, from January to November, the total profits of Industrial Enterprises above Designated Size nationwide reached 5610.07 billion yuan, down 2.1% year-on-year, 0.8 percentage points lower than that from January to October. The data shows a trend of "bottoming out and rebounding". In October this year, the profit growth rate of Industrial Enterprises above Designated Size dropped significantly, which really caused many people to worry about the current profit situation and operation trend of industrial enterprises. However, at that time, an analysis pointed out that from the current economic operation, the lower growth rate of industrial and enterprise profits in October may have "bottomed out", and the rebound on the data level is expected to come soon.

For example, a research report released by Southwest Securities macro team predicted that under the counter cyclical policy, infrastructure investment will rise steadily and domestic demand will remain stable. There will be a round of continuous replenishment overseas, and foreign demand will also turn to recovery. Stable demand will support corporate profits, especially in infrastructure and export related industries, and the recovery of profits will be better. So corporate earnings should have bottomed out in October. The data just released has basically confirmed such optimistic prediction. The reporter of the daily economic news noted that the growth rate of industries above Designated Size in November was fully 15.3 percentage points higher than that in October. Driven by the stronger data, the cumulative decline in profits of industrial enterprises from January to November also narrowed significantly. Zhu Hong, Senior Statistician of the industry department of the National Bureau of statistics, explained that there are two reasons for the growth of industrial enterprises' profits from negative to positive in November: first, the growth of industrial production and sales has accelerated significantly. In November, the added value of industries above designated size increased by 6.2% on a year-on-year basis, 1.5% faster than that in October; the operating revenue of industrial enterprises increased by 5.3% on a year-on-year basis, 3.8% faster than that in October. The expansion of production scale of the enterprise has brought about an increase in profits. Second, the factory price of industrial products decreased.

In November, the ex factory price of industrial producers decreased by 1.4% year on year, 0.2% lower than that in October; the purchase price of industrial producers decreased by 2.2% year on year, 0.1% higher than that in October. According to preliminary calculation, the profit growth rate of Industrial Enterprises above the full scale affected by the price change of industrial products in November is 4.0 percentage points higher than that in October. The profits of all kinds of ownership enterprises have improved. From the data of November, the profit growth of many important industries has significantly recovered, which is also an important reason for the overall data to strengthen. The data shows that in November, the sales growth of the chemical industry, petroleum processing industry and iron and steel industry accelerated and the profit growth picked up, mainly due to factors such as the recovery of market demand and the rise of product prices. In the same month, the profits of chemical raw materials and chemical products manufacturing industry decreased by 0.2% year-on-year, a sharp decrease of 151.5% compared with October; the profits of petroleum, coal and other fuel processing industry increased by 45.5%, a decrease of 31.2% in October; the profits of ferrous metal smelting and rolling processing industry decreased by 16.3%, a decrease of 48.0%.

Li Chao, chief Macro Analyst of Huatai Securities, told reporters that the performance of all kinds of ownership enterprises improved significantly in November, which is a significant feature of that month. In November, the profit growth of private enterprises and small enterprises accelerated. The profit growth of private enterprises and small enterprises increased by 14.7% and 8.6% year-on-year, respectively, 9.9 and 5.6 percentage points higher than that of October. In addition, in November, the growth rate of profits of state-owned holding enterprises and enterprises invested by foreign investors, Hong Kong, Macao and Taiwan turned from negative to positive. The profits of state-owned holding enterprises increased by 0.6% year-on-year, reversing the trend of continuous decline since the second half of this year. Under the circumstance that the single month profit growth rate of industrial enterprises has obviously improved, is it possible for the cumulative growth rate to "turn positive"? Li Chao analyzed to the reporter that considering the factors such as economic policy focusing on stable growth, inventory cycle switching, and positive progress in trade, it is expected that the enterprise profit rate and industrial product price will rise steadily, industrial production will also show positive performance, and the enterprise profit growth rate is expected to rise“ Ready to take off ", becoming regular in the first quarter of 2020.