China's Fortune 500 companies weak in profitability

BEIJING - More Chinese companies have made this year's Fortune Global 500 list but their typical profitability is weak, according to the annual ranking released on Monday.

A total of 100 Chinese firms joined the ranks of the world's top corporations as measured by revenue, compared with 95 last year. China's top oil refiner, Sinopec, overtook Exxon Mobil to go third on the list, the highest placed Chinese company ever.

PetroChina rose to fourth, while the State Grid Corporation remained seventh. A total of 80 Chinese companies climbed in the rankings.

Seven companies, including China Development Bank, were new to the list, whereas two firms from last year's fell out of the list.

In terms of the number of heavyweights, this year's results showed a narrower gap between China and the United States, the latter of which boasted 128 Fortune 500 companies, but profitability among some Chinese firms remained weak.

Data showed the average profit of 95 Fortune 500 companies from the Chinese mainland came in at $3.22 billion, lower than an average of $3.91 billion for all companies on the list. The average profit for 128 American firms was $6.24 billion.

Some Chinese companies suffered severe profit losses in the past fiscal year. The Fortune Magazine ranked 50 companies worldwide that have logged the biggest losses in 2013 and found China had 16 of them, more than any other country in the world.

All of the 16 loss-making companies were state-owned, with China Railway Material Group Co, Ltd. registering a staggering loss of $1.26 billion.

Chinese companies have made headway in business expansion, but there is much room for them to become "strong" and "great" companies, analysts said.

"Chinese companies have involved in more cross-border mergers and acquisitions, and they become better at obtaining resources overseas," said Jin Zhanming, a professor of business strategy from Tsinghua University.

Jin said it is common to have a fluctuation of four to five in the total number of Chinese Fortune 500 companies, but the country will see more of its firms join the list in the long run with their global vision strengthened.