By Clement Tan
HONG KONG, May 3 (Reuters) – Improving first-quarter results from some of China’s biggest steel and cement firms suggest that Beijing’s economic recovery plan may be starting to filter through into corporate profits.
That would bring a leavening touch to data released this week indicating that China’s factories are expanding less quickly than expected, more evidence that the pace of recovery is slowing despite a boom in credit supply.
Earnings growth for China-listed companies averaged 10.5 percent for the first quarter, a big improvement from losses in the same period last year of about 10 percent, but still short of the 16.5 percent expected, according to research from CLSA-Fortune Securities.
“Commodities-related companies have all shown some kind of improvement … but it’s still very much a company-specific story at this point,” said Shumin Huang, an investment manager with the Greater China team at JP Morgan Asset Management, who declined to make any specific stock mentions.