YuanBy James Parker: Whilst the economic data shows at least some signs of an anaemic turnaround, China’s corporate results are demonstrating just how difficult things have been.   China’s companies are busy reporting their 3rd quarter 2012 results and there have already been some disappointing results – pretty much explained by the general slowdown. Connected to this however, a worrying trend is developing on many companies’ balance sheets.
Some big names have already seen disappointing profit growth. State owned-Sinopec,  China’s (and Asia’s) largest oil refiner, saw its 3rd quarter profit fall 9.4% and January-September profits slump by 30%. Sinopec is trapped between high crude costs and government mandated price ceilings on sales to consumers.  Oil giant PetroChina also suffered, with its 3rd quarter net profit down 33% compared to last year, driven in part by a $6 billion refining loss over the year-to-date (YTD), and part by a similar squeeze on its natural gas import business (in which its YTD profits have fallen 93% compared to 2011).
China Southern Airlines saw third quarter (3Q) net profit fall 29%, whilst China Life, the largest Chinese insurer measured by premiums, swung to an outright loss in the July-Sept. period.  Meanwhile Sany Heavy Industry Co. Ltd, China’s largest maker of heavy machinery and construction equipment, was hit by 59% fall in 3Q net profit.  Baosteel, one of the largest producers of the metal, saw net profit down 4.88% from a year earlier.