(Yicai Global) April 20 -- Chinese enterprises owned by the central government should retain their operational targets this year despite negative impacts from home and abroad, according to an official.

The impacts are arising from factors including the Russia-Ukraine conflict and the Covid-19 pandemic, Peng Huagang, secretary-general of the State-owned Assets Supervision and Administration Commission of the State Council, said at a press conference yesterday.

Early this year, the SASAC said that the country's nearly 100 central SOEs should report growth rates of gross and net profit that are higher than that of the nation's gross domestic product in 2022. These firms' asset-liability ratios should remain at 65 percent or lower. Their profit margins should rise by 0.1 percentage point. Moreover, labor productivity should jump by 5 percent with increased research and development efforts.

The negative impacts began to affect the operation of central SOEs. In March, SOEs recorded more modest increases in revenue and net profit than the clip of rising a year ago. Evidently, indicators of business activity such as electricity and refined oil sales shrank, according to Peng.

In the first quarter, SOEs' net profits climbed 13.7 percent to a total of CNY472.3 billion (USD73.8 billion) from a year earlier, said Peng. Nearly 60 percent of the enterprises achieved double-digit growth. Firms' revenues rose 15.4 percent to CNY9 trillion (USD1.41 trillion). Their average asset-liability ratio was 65 percent as of March 31.

Achieving a good first quarter was not easy for central enterprises, said Li Jin, chief resercher at the China Enterprise Research Institute. Next, SOEs should focus on ensuring steady growth, supply, and prices. Moreover, the country should implement policies to bail out firms in difficulties, Li added.

This year is the final year of China’s three-year action plan for SOE reforms. The SASAC will study the next step of reform to consolidate the achievements of the three-year program, said Peng.

The program is expected to bear fruit this year. In terms of mixed-ownership reforms via listings, construction of new energy and power storage facilities is predicted to be accelerated and more high-quality state-owned capital will be concentrated in listed companies, said Li.

Editors: Xu Wei, Emmi Laine, Xiao Yi