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Metal mold industry profit growth trend
In the current landscape, many hardware mold companies are facing challenges such as limited funding and a lack of strong brand presence. In response, industry experts predict that these companies will ramp up investments in management improvements and technological upgrades. They are also expected to increase the share of high-end products in their portfolios and establish domestic sales departments to better tap into the growing Chinese market.
Looking ahead, the profits of Chinese industrial companies are anticipated to see a significant rise in the coming months. This optimism follows a recovery in the world's second-largest economy, which led to a rebound in industrial profits during the fourth quarter of 2012. According to recent data, total profits for large-scale industrial enterprises in China rose by 17.3% year-on-year in December 2012, reaching 895.2 billion yuan (approximately $144 billion). This marked the third consecutive month of double-digit profit growth, signaling a positive trend after eight months of decline in 2012.
The decline in profits had raised concerns among investors, prompting the government to implement more accommodative monetary policies and boost infrastructure spending to stimulate economic growth. Industry leaders from the China Manufacturing Champions League have predicted that the average profit growth for industrial companies in 2013 could reach 30%, with the highest growth expected in the third quarter. This surge is attributed to increased infrastructure and real estate investment, modestly rising export demand, falling raw material prices, and an expansive monetary environment.
In 2012, the overall profit growth for industrial companies was just 5.3%, but 2013 is expected to bring a substantial rebound. The Chinese economy grew at 7.8% in 2012, the slowest pace in 13 years. However, after seven consecutive quarters of slowing growth, the economy rebounded strongly in the final quarter of 2012, helping industrial profits escape negative territory.
Experts believe that this economic recovery will likely continue through the first half of 2013, and the mold and die industry should benefit accordingly. While overall industrial profits have improved, some sectors still face issues like overcapacity and ongoing industry slowdowns. Out of the 41 industries surveyed by the National Bureau of Statistics, 29 saw profit increases. However, steelmakers experienced a 37% year-on-year drop in profits, while chemical companies saw a 6% decline. On the other hand, power generation companies saw a 69% profit increase, and mold manufacturing companies reported growth of over 20%. Food processing firms also saw nearly 21% profit growth.
State-owned and state-controlled enterprises saw their profits fall by 5.1% in 2012, reaching 1.42 trillion yuan. Despite the slowest growth in 13 years, China still contributed about one-third of the global economic growth of 3.2%. Private enterprises, on the other hand, benefited significantly from the rebound in industrial profits. Their total profit rose by 20% year-on-year to 1.82 trillion yuan, with private mold companies alone contributing around 36 billion yuan, or approximately 2% of the total industrial profits.