Chinese listed companies’ average profitability growth has seen a marked slowdown to 25.6% in the 3Q2021 as compared to 43.7% during 1H2021 as per data from China International Capital Corp (CICC), as reported by SCMP. Also, revenues growth slowed to 23.2% from 26.7% in this period. Ai Xiongfeng, an analyst at Sinolink Securities said, “It is a reflection of surging raw-material prices squeezing profits of mid- and downstream industries, particularly against the backdrop of relatively inadequate demand”. Producer prices rose to its fastest pace in September in the last 25 years. Besides, the power shortage in the country and rising cost of energy production hurt manufacturing activity in addition to sporadic Covid outbreaks. Other indicators like slowing retail sales and the recent contraction in manufacturing evidence by the October PMI at 49.2 show a slowdown.
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