BEIJING (Reuters) - Profits earned by Chinese industrial companies in November fell 1.4 percent from a year earlier, marking a sixth consecutive month of decline, statistics bureau data showed on Sunday.
Industrial profits - which cover large enterprises with annual revenue of more than 20 million yuan ($3.1 million) from their main operations - fell 1.9 percent in the first 11 months of the year compared with the same period a year earlier, the National Bureau of Statistics (NBS) said on its website.
The November profits of industrial firms have seen some improvement from the previous month. In October, profits fell 4.6 percent from a year earlier.
“The November industrial profit data matched earlier output data and they showed some signs of stabilizing, which are in line with recent data from other Asian countries,” said Zhou Hao, China economist at Commerzbank in Singapore, adding the figures were slightly better than market expectations.
The NBS said investment returns for industrial companies in November increased from a year earlier by 9.25 billion yuan ($1.43 billion).
The jump in November profits from the auto manufacturing and electricity sectors, up 35 percent and 51 percent from a year earlier, respectively, helped narrow overall declines, the statistics bureau said.
“Declines in industrial profits narrowed in November, but uncertainties still exist,” said He Ping, an official of the Industry Department at NBS. He added that inventory of finished goods grew at a faster pace last month.
Profits of state-owned enterprises (SOEs) among major industrial firms saw a 23 percent slump in the first 11 months this year from the same period in 2014. Mining remained the laggard sector, with profits falling 56.5 percent in the same period.
Aluminum producer China Hongqiao Group (1378.HK) said in early December it would cut annual capacity by 250,000 tonnes immediately to curb supplies.
Eight Chinese nickel producers including state-owned Jinchuan Group Co Ltd [JCGRP.UL], said they would cut production by 15,000 tonnes of metal in December and reduce output next year by at least 20 percent from this year, in a bid to lift prices from their worst slump in over a decade.
China’s producer prices have been in negative territory for nearly four years due to weak domestic demand and overcapacity.
The country’s top leader last week outlined main economic targets for next year after they held the annual Central Economic Work Conference, where it said the government will push forward “supply-side reform” to help generate new growth engines in the world’s second-largest economy while tackling factory overcapacity and property inventories.
Editing by Jacqueline Wong