The Growth Rate of Industrial Profit Slows Down and the Structure Tends to Improve from January to August 2018

　　I. The results of the supply-side structural reform continue to reveal:

　　Firstly, the cost continues to drop. From January to August, the cost and expense per RMB 100 of main business income of industrial enterprises above designated size was RMB 92.62, declined by RMB 0.37 on a year-on-year basis; of which the cost per RMB 100 of main business income was RMB 84.39, declined by RMB 0.35 on a year-on-year basis. The cost reduction effect of state-owned holding enterprises is more obvious. From January to August, the cost and expense per RMB 100 of main business income of state-owned holding industrial enterprises was RMB 88.71, declined by RMB 1.14 on a year-on-year basis. Secondly, the leverage rate continued to decline. At the end of August, the asset-liability ratio of industrial enterprises above designated size was 56.6%, declined by 0.5% on a year-on-year basis. Specifically, the asset-liability ration of state-owned holding enterprises was 59.3%, declined by 1.4% on a year-on-year basis.

　　II. The profitability of industrial enterprises improves

　　Firstly, the profit rate rose on a year-on-year basis. From January to August, the profit rate of the main business income of industrial enterprises above designated size was 6.43%, with a year-on-year growth of 0.35%. Secondly, the core profitability increased. From January to August, the operating profit achieved a year-on-year growth of 19.1% among the total profit of industrial enterprises above designated size, and the growth rate was 2.9% higher than that of the total profit; the operating profit accounted for 97.7% of the total profit, with a year-on-year growth of 2.5%, indicating that the income brought by the core business of enterprises increased.

　  III. The profit of consumer goods and high-tech manufacturing industries increases rapidly

　　From January to August, the profit of consumer goods manufacturing industry above designated size increased by 8% on a year-on-year basis, 0.5% higher than that from January to July; that of high-tech manufacturing industry increased by 6.4%, grew by 1.2%; that of the mining industry increased by 53.2%, declined by 0.2%; that of raw material manufacturing industry increased by 36.4%, declined by 4.3%.

　　Judging from the current situation in August, the growth rate of industrial profits slowed down compared to July, mainly due to the double decline of the growth rate of enterprise income and price rise. In addition, it is also related to the higher profit base of the previous year.