Metal mold industry profit growth trend

Experts believe that the current hardware mold companies due to lack of funds and lack of their own brands, metal mold companies will increase management and technological transformation of investment, expand the proportion of high-end products, and set up domestic sales departments, and actively expand the domestic market.

It is expected that the profits of Chinese industrial companies will increase significantly in the coming months. With the recovery of the world’s second-largest economy, the profits of Chinese industrial companies rebounded in the fourth quarter of last year.

Data show that in December last year, the total profit of Chinese industrial enterprises above designated size increased by 17.3% year-on-year to 895.2 billion yuan (US$144 billion). This is the third consecutive month that Chinese industrial companies’ profits have achieved double-digit growth. Last year, the profits of Chinese industrial companies fell for eight consecutive months, which made investors feel uneasy, prompted the government to relax monetary policy and increase infrastructure investment to boost growth.

The leader of the China Manufacturing Champions League: “We expect the average profit growth of industrial companies in 2013 to be 30% in 2013. The year-over-year profit growth rate will peak in the third quarter.” The reason for the faster profit growth this year is that infrastructure and real estate investment have grown substantially. The demand for Chinese exports has risen modestly, raw material prices have fallen, loose monetary conditions, and a low 2012 base. In 2013, the profits of industrial companies will increase by 30%, which will mark a substantial rebound on the basis of last year. In the whole year of 2012, the profits of industrial companies only increased by 5.3%.

The Chinese economy grew by 7.8% last year, the lowest level in 13 years. However, after seven consecutive quarters of economic growth slowed down, the economy rebounded strongly in the fourth quarter of last year, prompting the profits of industrial companies to get rid of negative growth.

"It is expected that China's economic rebound will continue at least in the first half of 2013, and the profitability of mold and die industry companies should be the same." Despite the rebound in the total profits of China's industrial companies, certain industries are still struggling with overcapacity and the continued slowdown of the industry itself. Of the 41 industries surveyed by the National Bureau of Statistics (Statistics), profits of 29 industries have increased, but last year steel makers' profits fell by 37% year-on-year, and chemical companies' profits dropped by 6%. Profits from power generation companies soared by 69%. At the same time, profits of mold manufacturing companies grew by more than 20%, and profits of food processing companies increased by nearly 21%.

Last year, the profits of state-owned and state-controlled companies fell by 5.1% to 1.42 trillion yuan. Even though China's economic growth hit its lowest level in 13 years last year, it still contributes about one-third of the global economic growth of 3.2%. Privately-owned enterprises have benefited greatly from the rebound in profit growth of industrial enterprises last year. The total profit increased by 20% year-on-year to 1.82 trillion yuan. Among them, the total profit of private mold companies reached 36 billion yuan, accounting for about 2% of the total profits of industrial enterprises.