6-8 Month Shoe Industry Profit Margins Remain Stable

With the help of sub industry data, we have strengthened the judgement on the reasons for the decline in the overall profit growth rate of industrial enterprises in 6-8 months ago, that is, the decline in the profit growth rate of industrial enterprises in the current period is not due to the trend of economic operation. The main factors are the high base effect during the same period of the year and the effect of crude oil price fluctuation under the control of refined oil prices.

After eliminating seasonal factors, the profit margins of different industries can be divided into five situations in the near future: (1) profit margins continue to rise and reach high levels; (2) profit margins continue to rise and have stabilized at a high level recently; (3) profit margins have risen markedly from the bottom; (4) margins have remained stable; (5) profit margins have dropped significantly.

When profit margins increase or maintain high, the industry's profit growth rate will be relatively higher or faster in the future. Therefore, the industry in the first three situations deserves attention.

The industries that have continued to rise in profit margins and reach high levels include: agricultural and sideline food processing, food manufacturing, paper and paper products, pharmaceutical manufacturing, general equipment manufacturing, special equipment manufacturing, electrical machinery and equipment manufacturing, communications equipment, computers and other electronic equipment manufacturing industries.

There are three industries with high profit margins, including pportation equipment manufacturing, non-metallic mineral products and textile industry.

In the sub sectors of pportation equipment manufacturing, the profit margin of shipbuilding and floating device manufacturing and aerospace manufacturing industry has increased significantly, and the former has an obvious upward trend.

The industry with profit margins rising obviously from the bottom: smelting and rolling processing of non-ferrous metals.

In September 27th, the Statistics Bureau released the overall profit growth data of industrial enterprises in 1-8 this year.

This week, we get the data from different industries, so as to make some analysis of the changing trend of profitability in various industries in the 6-8 months. On the other hand, we can find some more direct arguments for our analysis of the overall profit growth data in September 27th.

1.. The trend of high profit growth has not changed: some new arguments. In the 6-8 months of this year, the profit of industrial enterprises increased by 30.6% over the same period last year, and the growth rate was 10.7 percentage points lower than that in 3-5 months.

In September 27th's report, we suggested that the decline in the profit growth rate of industrial enterprises in the 6-8 month was not due to the trend of economic operation, because sales revenue increased by 27.4% from the growth of sales revenue, which was equal to that in 3-5 months.

There are two practical factors: one is the impact of the high base effect over the same period last year, which we expected.

Another important factor is the increase in crude oil prices in 6-8 months. However, the domestic oil price has not been adjusted in time, resulting in the loss of the whole industry in the refining industry. The potential profit loss is tens of billions, which is enough to reduce the overall profit growth of the current industrial enterprises by a few percentage points.

After obtaining the data from different sectors, we can further analyze the impact of the above two factors.

First of all, after recounting data from petroleum processing, coking and nuclear fuel processing industries, we have recalculated the profit growth and profit margin changes of industrial enterprises.

It can be seen that if the petroleum processing, coking and nuclear fuel processing industries are not included, the profit growth rate of the rest of the industrial enterprises in the 6-8 months will be 27.2%, which is only 4.9 percentage points lower than that in 5-8 months, instead of the original 10.7 points. Moreover, in the 1-2 months and 3-5 months, the overall industrial enterprises' profits could be significantly higher than that of last year's 8-11 months. The main reason is that the oil processing, coking and nuclear fuel processing industry has turned from a large loss in the same period last year to a large profit. If the industry is excluded, the overall profit growth rate of the other industrial enterprises in 1-2 months and 3-5 months is only 33.5% and 33.5%, respectively, which is about a percentage point lower than that before the elimination.

This fully reflects the impact of crude oil price fluctuations under the control of refined oil prices.

After removing data from petroleum processing, coking and nuclear fuel processing industries, the total profit margins of other industrial enterprises in 6-8 months also changed, from 3-5 months to 3-5 months.

This has also proved from one aspect that the profitability of enterprises has not declined. The decline in profit growth rate of industrial enterprises in 6-8 has been affected by high base factors in the same period last year.

In fact, if the oil processing, coking and nuclear fuel processing industries are not included, the profit growth of other industrial enterprises in the 6-8 months of last year will be increased by 5.8 percentage points compared with that in 3-5 months. The industries with significant decline in profit growth this year will be affected by this factor, such as chemical fiber industry, ferrous metal smelting and calender processing industry.

2. the change trend of profit margins of various industries. For the data of sub sectors, we mainly analyze the changes of net profit margin indicators in different industries.

Because simple profit growth will be affected by the size of the same period last year and the continuous accession of new enterprises.

However, if the profitability of enterprises is improved, the profit growth rate in the future will be faster.

Because the net profit margin of enterprises will be affected by seasonal factors, they need to be eliminated.

In the 39 industrial categories, the number of Listed Companies in the 12 industries or industries such as ferrous metal mining, non-ferrous metal mining, tobacco products and other industries is relatively small, or the research methods we adopt are not applicable, so we do not consider these industries.

For the other 27 industries, after eliminating the seasonal factors, the profit margins in recent periods can be divided into five situations: first, the profit rate will continue to rise or reach a high level in a certain period of time. This is the industry that needs our attention most.

It includes agricultural and sideline food processing, food manufacturing, paper and paper products, pharmaceutical manufacturing, general equipment manufacturing, special equipment manufacturing, electrical machinery and equipment manufacturing, communications equipment, computers and other electronic equipment manufacturing industries.

The trend of the pharmaceutical manufacturing industry, the general equipment manufacturing industry and the special equipment manufacturing industry in the last period of data analysis is more obvious, and their profit growth in the month of 6-8 is also better, especially in the pharmaceutical manufacturing industry of 69.5%, obviously higher than the month of 3-5.

From the perspective of further fractionize industries, in the pharmaceutical manufacturing industry, the production of pharmaceutical preparations, the manufacture of biological and biochemical products by Chinese patent medicine, the manufacture of chemical raw materials, the manufacture of hygienic materials and medical products, the profit margin of the 5 industries increased, and the latter three increased relatively.

General equipment manufacturing industry, metal processing machinery manufacturing industry; fan, weighing apparatus, packaging equipment; metal casting, forging industry 3 sub sectors profit margin increased, of which metal processing machinery manufacturing industry rose relatively obvious.

In the special equipment manufacturing industry, the current profit rate of the special equipment manufacturing industry of electronics and electrical machinery increased relatively significantly; in the electrical machinery and equipment manufacturing industry, the current profit margins of wire, cable, optical cable and electrical equipment manufacturing industry and non electric household appliances manufacturing industry increased relatively.

In the communications equipment, computers and other electronic equipment manufacturing industries, the profit margins of the radio and television equipment manufacturing industry, the electronic components manufacturing industry, and the household audio-visual equipment manufacturing industry increased relatively, but historically, it is still not very high.

Two is the industry with a high profit margin in the recent period, which deserves our attention.

Because of the high profit margins in these industries, the growth rate of future profits will still be relatively high.

This mainly includes three industries: pportation equipment manufacturing, non-metallic mineral products and textile industry.

The profit growth of the first two industries in the 6-8 months was 58.5% and 75.8% respectively.

Further, with regard to various sub sectors of pport equipment manufacturing, the recent profit margins of shipbuilding and floating device manufacturing and aerospace manufacturing industry have increased significantly, and the former has an obvious upward trend.

Three is the industry with profit margins rising sharply from the bottom.

The continued rise in profit margins means that the profitability of these industries is improving and therefore deserves attention.

This is mainly the smelting and calendering processing of non-ferrous metals.

Four, profit margins remained stable.

It includes coal mining and washing; oil and natural gas extraction; beverage manufacturing; textile and clothing, shoes and hat manufacturing; printing and recording media; rubber products; plastic products; instrumentation and culture, office machinery manufacturing.

(five) the profit rate has continued or declined significantly, including furniture manufacturing, chemical raw materials and chemical products manufacturing, ferrous metal smelting and calendering processing, metal products industry, power and thermal production and supply, chemical fiber manufacturing.