Profits of China's Industrial Firms Up 18.7% in First Half 2026, Electronics Sector Surges 96.9%

In the first half of 2026, profits of China's industrial enterprises above designated size totaled 3.94799 trillion yuan, up 18.7% year-on-year, accelerating 3.2 percentage points from the first quarter. In June alone, profits rose 15.1% year-on-year. Revenue increased 6.5% year-on-year, accelerating 1.5 percentage points from the first quarter. Cost per 100 yuan of revenue stood at 84.89 yuan, down 0.55 yuan year-on-year, with cumulative unit costs declining steadily since 2026. The revenue profit margin was 5.70%, up 0.59 percentage point year-on-year, reaching the highest cumulative monthly level since 2024.

By sector, mining profits rose 33.5% year-on-year, manufacturing increased 20.1%, and utilities (electricity, heat, gas, and water production and supply) fell 4.2%. By enterprise type, joint-stock enterprises saw profits up 24.7%, state-controlled enterprises up 17.9%, and large, medium, and small enterprises up 20.3%, 21.3%, and 12.9%, respectively. As of end-June, total assets of these enterprises amounted to 194.60 trillion yuan, up 6.1% year-on-year; total liabilities were 113.52 trillion yuan, up 6.6%; the asset-liability ratio stood at 58.3%, up 0.3 percentage point year-on-year.

Profits in the electronics sector surged 96.9% year-on-year, driven by the rapid integration of artificial intelligence across various fields and soaring demand for computing power, contributing 8.5 percentage points to the overall profit growth of industrial enterprises above designated size. Within the sector, computer manufacturing and computer peripheral equipment manufacturing profits jumped 689.3% and 305.8%, respectively; integrated circuit manufacturing and semiconductor discrete device manufacturing profits soared 2579.5% and 31.2%; electronic specialty material manufacturing and electronic circuit manufacturing profits rose 209.7% and 26.9%. Among emerging industries, regenerated rubber manufacturing and graphite and carbon product manufacturing profits increased 133.3% and 61.0%; aluminum smelting and copper smelting profits rose 117.1% and 53.9%; optical fiber manufacturing and optical cable manufacturing profits climbed 410.4% and 39.8%; additive manufacturing equipment manufacturing and semiconductor device special equipment manufacturing profits grew 55.4% and 18.7%.

In the raw materials sector, profits rose 71.7% year-on-year, contributing 8.8 percentage points to overall industrial profit growth. Driven by strong demand for copper and aluminum, the non-ferrous metals industry saw profits up 99.4%, contributing 4.7 percentage points to total growth. Buoyed by rising prices of petroleum-related products, the petroleum processing industry turned a profit from a year-earlier loss, and the chemical industry saw profits increase 67.8%. Traditional industries faced pressure: automobile manufacturing profits fell 19.5% year-on-year, ferrous metal smelting and rolling down 25.0%, and non-metallic mineral products down 47.8%.

As of end-June, finished goods inventory of industrial enterprises above designated size stood at 7.11 trillion yuan, up 9.5% year-on-year; accounts receivable were 28.60 trillion yuan, up 8.1%. Finished goods inventory turnover days were 21.1 days, an increase of 0.4 day year-on-year; average collection period for accounts receivable was 71.7 days, up 0.8 day. In the first half, expenses per 100 yuan of revenue were 8.45 yuan, down 0.06 yuan year-on-year; revenue per 100 yuan of assets was 72.3 yuan, up 0.5 yuan; and per capita revenue was 1.913 million yuan, up 127,000 yuan year-on-year.