China records economic slowdown

losses, according to information disclosure from the Shanghai and Shenzhen stock exchanges.
Of the 566 companies that had unveiled performance forecast for the January-March period, 222 predicted positive growth, 27 expected a swing to the gains while 150 said profits would decline, 149 forecast a turn to losses.  
The general downward trend in their profitability came as China’s economy expanded 8,1 percent year-on-year in the first quarter of 2012, marking the fifth consecutive quarter of decline.
A major feature that characterised listed companies’ first-quarter performance was the contrast between rising revenues and dwindling profits.  
Statistics showed gross revenue of the 713 companies grew at an average rate of 10,21 percent year-on-year in the first quarter, but net profits dropped 8,99 percent during the period.
Taking Deluxe Family, a real estate developer in Shanghai, as an example, it reported a stunning revenue growth of 51,377.45 percent in the first quarter, but net profits logged at 89,07 percent slump.
According to the companies’ statements, rising prices of raw materials and increasing operation costs were the main drags on their profitability, added by a combination of hikes of management fees and losses arising from investments.
While the release of quarterly results is drawing to a close, many companies had started to publish interim forecasts.
As of yesterday, a total of 323 companies had disclosed interim forecasts, with 199 predicting gains, 71 declines and 47 losses, while 6 remained uncertain.
Based on current forecasts, it was still too early to jump to conclusions about the second-quarter prospects, but many analysts held that profits had bottomed out in the first quarter and interim results would generally improve on grounds that economic growth would rebound.
Shen Jianguang, chief economist of Mizuho Securities Asian Co, cited the pickup in the consumption and industrial production as possible signs of an improving economy. — Xinhua.