Listed firms' financial reports reveal growing economic strength

BEIJING - The third-quarter performance forecast reports from China's listed companies have beaten market expectations.

As of Tuesday, more than 2,100 listed firms had disclosed their advance third-quarter financial reports, with 71.7 percent posting rising net profits or turning losses into gains, according to data compiled by Wind, a leading information service provider.

More than 57 percent of the companies expected their Q3 net profits to rise, and more than 30 percent of them forecast over 50 percent growth in net profits.

This reinforced the message conveyed in a string of major indicators that the economy is on a steadier footing.

A breakdown of the company reports showed the country's economic restructuring and industrial upgrading continued apace, ensuring strength for future growth.

Traditional sectors such as steel, non-ferrous metals and coal mining were revitalized by the ongoing supply-side structural reform, while emerging industries and high-end manufacturing maintained fast expansion.

Of the 23 listed steel makers that released Q3 advance financial reports, 22 companies expect to reap a profit and 19 expect net profits to more than double in the first three quarters of the year.

Angang Steel Company said its net profits would rise 236 percent to 3.3 billion yuan ($497.7 million) during the first three quarters on recovering market demand and cost-efficiency moves.

The coal mining sector also saw improving profitability amid the country's efforts to cut excess capacity and improve efficiency.

Shanxi Xishan Coal and Electricity Power forecast its net profits to grow six-fold to 1.4 billion yuan in the first three quarters, thanks to the country's policies to cut overcapacity and the company's attempts to optimize its product structure and marketing strategy.

As China tries to transition to an innovation and service-driven economy, high-tech and emerging industries are picking up momentum.

Telecommunications, new energy vehicles and organic light-emitting diode manufacturers all posted hefty profit growth.

BOE Technology, a supplier of display products, said its profits might grow by up to 4,521 percent in the first three quarters, amounting to 6.5 billion yuan, as technological innovation spurred new businesses.

The picture painted by the financial reports is in line with official data, which showed that profits of major industrial firms surged 21.6 percent in the first eight months, up from 8.4 percent during the same period of 2016.

GDP grew at a faster than expected 6.9 percent in the first half of the year, with consumption and services sector contributing a major share of the growth.

In view of the strong growth momentum, major international institutions, including the IMF and the World Bank, and investment banks have raised their forecasts for China's growth this year.

At the annual meeting of the IMF and the World Bank in Washington Sunday, China's central bank governor Zhou Xiaochuan said the economy would likely expand 7 percent year on year in the second half.

GDP growth for the first three quarters and other indicators such as consumption, industrial output and investment are due to be released Thursday.