In gloom of economic data, hope flickers for China Inc

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.

Continue reading “In gloom of economic data, hope flickers for China Inc”