China's SOEs face poor profit prospects

BEIJING - With China's State-owned enterprises (SOEs) posting growth of just 5.3 percent from January to April this year, prospects for the SOEs' profitability in 2013 remain poor, analysts said.

The SOEs saw their total profit growth slow to 5.3 percent year on year to reach 689.13 billion yuan ($111.32 billion) in the first four months, according to the Ministry of Finance (MOF).

The growth rate was lower than the 7.7-percent increase recorded for the first quarter and average growth of 5.8 percent in 2012, official data showed.

The SOEs lost their position as the country's most profitable sector in 2012, when China COSCO Holdings Co, the country's largest shipping company, lost 9.56 billion yuan after a deficit of 10.45 billion yuan for 2011.

Overcapacity, inefficient cost control and slow industrial upgrading can be blamed for the slowdown, according to Li Jin, a senior researcher with the China Enterprise Research Institute.

From January to April 2013, the total profits of locally-administered SOEs suffered a decline of 14.7 percent to 152.89 billion yuan, according to the MOF.

For centrally-administered SOEs, the situation is also difficult. They generated profits of 536.24 billion yuan in the first four months of 2013, a 12.8 percent increase year on year, but down from 16.5 percent compared with the figure from January to March.