Central SOEs bask in H1 profit glory

For the first time in history, half-yearly net profits of centrally administered State-owned enterprises, or central SOEs, exceeded 1 trillion yuan ($155 billion) in the first half of this year.

Net profits soared by 133.3 percent year-on-year to 1.02 trillion yuan on combined revenues of 17.1 trillion yuan, up 28.2 percent year-on-year, data from the State Council's State-owned Assets Supervision and Administration Commission, or SASAC, showed late on Tuesday.

Company leaders and experts said on Wednesday this historic feat appears to confirm the government's continued support for industry's digital transformation is paying off, helping SOEs to cultivate fresh growth points in strategic industries.

This, they said, will further enrich the Chinese economy.

Amid steady economic operations and sustained external demand, central SOEs' first-half profit surge came on the back of their breakthroughs in core technologies and in building modern industrial chains, ably supported by an expanding global presence, especially in economies participating in the Belt and Road Initiative, the SASAC said in a statement.

For instance, Beijing-headquartered China Railway Rolling Stock Corp, or CRRC, is backed by more than 80 branches in 26 countries and regions. The company has set for itself the goals of achieving all-round breakthroughs from providing product standards to technical standards.

It also specializes in equipment manufacturing and after-sales service in overseas markets, and has embraced intelligent manufacturing.

Now, CRRC is aiming to succeed in developed markets, including the United States and Austria, to increase its sales, said Wei Yan, its vice-president.

During China's 14th Five-Year Plan period (2021-25), CRRC plans to build itself into a company with expertise in rail transit equipment manufacturing at its core, layered over by a capacity to evolve into a world-class high-end equipment manufacturer, and systems and solutions provider with global competitiveness.

Last month, CRRC unveiled its first batch of trains developed for the Los Angeles Metro project. It also rolled out the first set of double-decker EMUs, or electric multiple units, manufactured for its clients in Austria.

In recent years, CRRC's subsidiaries also won a tender of $1.6 billion to modernize Mexico City's Metro Line 1, and secured a long-term maintenance service order with contract value of $350 million in Abu Dhabi, the United Arab Emirates.

Earlier this month, Power Construction Corp of China, another Beijing-based central SOE, signed an EPC－engineering, procurement, and construction－contract with its Vietnamese client to participate in the construction of the 350-megawatt offshore wind power project in Ca Mau, Vietnam, the largest of its kind in Southeast Asia.

"Once operational, the wind farm is expected to produce about 1.1 billion kilowatt-hours of electricity annually, an equivalent of reduction of about 450,000 metric tons of standard coal and 880,000 tons of carbon dioxide," said Yao Qiang, the group's vice-president.

Central SOEs are guided by certain goals defined in a three-year action plan (2020-22). The country aims to achieve more than 70 percent of the goals by the end of this year.

Central SOEs have taken a host of measures to accelerate the mixed-ownership reform and improve their revenues and profits with sharpened focus on key business areas, said Li Hongjuan, a researcher at the Institute of Economic System and Management.

The IESM operates under the aegis of the National Development and Reform Commission, the country's top economic regulator.

The SASAC said the three-year action plan for SOEs is designed to implement measures outlined by the 19th National Congress of the Communist Party of China in late 2017.

Under the plan, the SOEs should adapt themselves to market-oriented and law-based rules and norms in the new era as soon as possible and assume greater responsibility in an open and innovative environment.

"Facilitated by these moves, China will not only be able to promote the next level of integration of the innovation and industrial chains, but also speed up the improvement of systems and mechanisms that are conducive to the high-quality development of its real economy, especially in the manufacturing sector," said Liang Jun, president of the Guangdong Association of State-owned Capital.