(Yicai Global) Oct. 27 -- Profits at China’s industrial companies increased for a fifth month in a row in September, despite slowing to 10.1 percent from a year earlier, due to changes in industrial product prices and other factors.

Profits at companies with annual revenue of more than CNY20 million (USD3 million) stood at CNY646.43 billion (USD96.64 billion) last month, according to data the National Bureau of Statistics released today. Profits jumped 19.1 percent in August.

Three factors weighed on earnings, NBS senior statistician Zhu Hong said. Changes in industrial product prices squeezed margins, while certain industries made big provision for asset impairment losses. Profit growth among electronics, auto and other sectors also fell on higher costs for raw materials, sales, research and development as well as a high comparative base in the same period last year.

Prices were the main reason for the slower profit growth, Zheng Houcheng, director of Yingda Securities Research Institute, told Yicai Global.

Producers’ ex-factory prices rose 0.1 percent last month over August, while the purchase price gained 0.4 percent, according to previous NBS data.

In the January to September period, profits at industrial firms slid 2.4 percent to CNY4.37 trillion (USD652.3 billion), with the rate of decline narrowing by 2 percentage points from that in the first eight months, NBS data showed.

Though earnings continued to recover steadily in the first three quarters, total profit and revenue growth rates have not yet turned positive, Zhu said, adding that the growth rate of accounts receivable and finished goods inventories are still high, and the improvement in corporate profits still needs consolidation.

Profits will also gain month-on-month in October until December, Zheng said, while the average for the fourth quarter will probably be lower than in the third.

Editor: Ben Armour