Huatai Securities: Industrial enterprise profits generally improved in May, with industry divergence intensifying.

Huatai Securities' research report states that the profit growth rate of industrial enterprises in May slightly declined to 21.1% from 24.7% in April, but it remained higher than the 15.5% in the first quarter, and revenue growth continued to pick up, indicating that corporate profitability is generally improving. The energy and AI chain-related industries are the main supports for profit growth. However, with the blockade of the Strait of Hormuz exceeding three months, the impact of supply shocks has deepened, and the capacity utilization rates of some midstream and downstream enterprises have further weakened, leading to a widening divergence in industry profitability. In May, oil prices marginally declined, but the profit growth rate of the overall upstream petrochemical chain remained high. Benefiting from robust global AI investment demand, the electronics and computer industry continued to lead in profit and revenue growth, with its contribution to the overall industrial enterprise profit growth increasing from 6.7 percentage points to 9.6 percentage points. Non-ferrous metal smelting and chemical products contributed 6.4 and 4.2 percentage points, respectively, with the three collectively contributing about 20.2 percentage points. Meanwhile, downstream manufacturing related to domestic demand still showed weak profit growth, especially in automobiles and furniture manufacturing, where the decline further widened. (People's Finance News)
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