中/下游工业利润率有所提高

1AnalystWU WanyiSAC No. S0570524090005SFC No. BVN199wuwanyi@htsc.com+(86) 10 6321 1166AnalystEva YISAC No. S0570520100005SFC No. AMH263evayi@htsc.com+(852) 3658 6000AnalystWANG Mingshuo, CFA, PhDSAC No. S0570123070085SFC No. BUP051wangmingshuo@htsc.com+(86) 10 6321 1166 This report must be read with important disclosures and analyst certifications located on the end of the report.3)In April, yoy profit growth for downstream manufacturing enterprisesturnedpositive from-3.5%in March to 5.4%,boosted by marginrecovery, in our view. Computers and automobiles saw improved profitperformance.In April, the seasonally-adjusted profit margin picked up from6% in March to 6.3%, while yoy revenue growth slowed from 7.2% in Marchto 5.4%. By sector, the yoy profit decline for auto manufacturing narrowedfrom-28.1% in March to-2.2% in April, reducing its drag on overall yoyindustrialprofit growth from-2.2pp to-0.2pp.The yoy profit growth incomputer communications rose from 12.7% in March to 30.8% in April, liftingits contribution to overall profit growth from 1.2pp to 2.3pp, partly due to the‘trade-in’policy stimulus, in our view. This report must be read with important disclosures and analyst certifications located on the end of the report.3Byownership,in April,state-owned enterprises(SOEs)and foreign-funded industrialenterprises saw slower yoy profit growth vs 1Q25, while private-sector industrial enterprisesposted a strong rebound.In April, the yoy profit growth for SOEs/foreign-funded industrialenterprises slowed from-1.4/+2.8% in 1Q25 to-4.4/+2.5%, while that for private-sector industrialenterprises turned positive from-0.3% to +14.1%. For other financial indicators:1)The seasonally-adjusted overall profit margin of industrial enterprises in China fell from5.4% in 1Q25 to 5.3% in April, but improved marginally from 5.2% in March. Upstreamindustrialsectors saw profit margins decline in April vs 1Q25,while midstream anddownstream sectors recorded margin improvements. In April, for upstream manufacturingsectors, profit margins of coal mining & addressing/oil & gas extraction sank from 12.8/33.2%in 1Q25 to 10.3/28.7%, weighing on the overall upstream profit margin; however, those offerrous metal/non-ferrous metal/cement mining & dressing gained 2/2.7/4.6pp vs 1Q25.Midstreammanufacturing margins picked up across most sectors except petroleumprocessing/papermaking,which saw profit margins drop 1.4/0.6pp.Profit margins ofinstrumentation/transportequipmentrose6/3.3pp.Profitmarginsofdownstreammanufacturing sectors increased marginally but showed mixed trends in April: profit margins offood and beverage demonstrated seasonal declines, while those of automobiles/textiles &apparel/furniture manufacturing sectors rallied 0.5/0.7/1.7pp vs 1Q25. We think sustainedimprovements in profit margin for downstreammanufacturing sectors still hinge upon a furtherstrengthening of domestic demand momentum.2)In April, seasonally-adjusted inventory growth slowed from 4.1/4.0% in March/1Q25 to3.9%, potentially indicating a slower restocking among industrial enterprises,in ourview;the leverage ratio (seasonally-adjusted) edged down vs March to 57.71%, while theratioof accounts receivable to sales revenue rose from 18.6% in March to 18.9%.3)In 1Q25, yoy growth in industrial enterprise loss amount continued to slow from 16.5%for full-year 2024 to-3.6%.The financial expense-to-revenue ratio decreased from 0.65% for2M25 to 0.59% for March. Additionally, in 1Q25, yoy growth of financial expenses turnednegative from 3.5% in 2M25 to-0.5%; the seasonally-adjusted ratioof current assets to totalassets continued to improve.(The data on industrial enterprises’financial expenses, currentassets, and loss amount for April have not yet been updated.)Risks: 1) weaker pro-growth policy than we expect, and soft momentum of domestic demandrecovery; and 2) steep escalation in China-US trade tensions possibly weighing on foreign demand.Fig.1:Industrial enterprises’profit yoy rallied in AprilFig.2:Midstream industrial enterprises’profit yoy rose in April vsMarchSource: CEIC, Huatai Research20212022202320242025Yoy revenue growth for industrial enterprisesYoy profit growth for industrial enterprises(400)(200)02004006008001,0001,200(50)0501001502002503002019202020212022202320242025Industrial enterprises' profitMidstream industry profitDownstream industry profitUpstream industry profit (rhs)(%yoy)(%yoy) Source: CEIC,Huatai Research This report must be read with important disclosures and analyst certifications located on the end of the report.Source: CEIC, Huatai ResearchFig.5:Profitmarginsof(seasonally adjusted) decreased mom in AprilSource: CEIC, HuataiResearchFig.7:Profit margins of downstream industrial enterprises(seasonally adjusted) increased mom in AprilSource: CEIC, Huatai Research10121416182022242628JanFeb Mar Apr May Jun(%)Upstream industrial enterprise profit margin(seasonally adjusted)202445678JanFeb Mar Apr May Jun(%)Downstream industrial enterprise profit m