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TMCNet:  Analysis: China Q4 electronics, IT industry likely to rebound

[November 30, 2012]

Analysis: China Q4 electronics, IT industry likely to rebound

BEIJING, Nov 30, 2012 (Xinhua via COMTEX) -- China's electronics and information technology industry is likely to rebound in the final quarter of this year as output has been growing faster and the economic environment taken a turn for the better, according to a report by the China Securities Journal on Friday.

In the first 10 months, added value of the electronics industry increased by 11.3 percent year on year, staying in the range of 11 percent and 11.5 percent for the third consecutive month; and the sales value rose 10.7 percent to 6.87 trillion yuan, according to the Ministry of Industry and Information Technology.

However, the industry's revenue and profit growth were unsatisfactory. Revenue growth of the electronics and IT industry declined quarter by quarter and the sales revenue growth in the first three quarters were respectively 10.7 percent, 8.3 percent, and 7.7 percent.

Meanwhile, the profits of the industry continued to decrease.

In the first nine months the electronics and IT industry's profits dropped by 6.5 percent year on year, though the rate decrease was 7.5 percentage points smaller than that in the first half of this year.

In addition, the production and operation costs of China's electronics and IT firms remained high. The costs of major businesses of the industry rose 8.7 percent year on year in January-September to 5.41 trillion yuan, generally maintaining the same level with revenue growth.

In light of the sub-sectors, the telecom equipment and electronic device sectors maintained rapid growth, while the computer sector developed more slowly.

The MIIT revealed that in the first 10 months the telecom equipment sector realized sales value and export delivery value of 1.06 trillion yuan and 542.5 billion yuan respectively, up 16.8 percent and 17.5 percent, which were 6.1 percentage points and 9.5 percentage points higher than the electronics and IT industry's average.

China Securities Co. said that in the first nine months, the telecom equipment sector did not show outstanding performance. But in view of the optimistic expectations for accelerating 4G promotion, the realization of the "broadband China" strategy, and the improvement in the "Beidou" navigation system, the market was positive about the Guangzhou Haige Communications Group (002465.SZ), Chengdu GoldTel Electrical Technology Co. (300101.SZ), Hi-Target Navigation Tech Co. (300177.SZ), Sunwave Communications Co.

(002115.SZ), and FiberHome Telecommunication Technologies Co.

(600498.SH).

The electronic device sector showed sluggish development in the first half. But beginning from the second half, particularly in August-October, the sector's sales value and export delivery value both surged by over 20 percent each month, rebounding rapidly. By the end of October, the electronic device sector accomplished sales value and export delivery value of 1.04 trillion yuan and 671.4 billion yuan, up 16.0 percent and 13.6 percent, which were 5.3 percentage points and 5.6 percentage points higher than the electronics and IT industry's average.

Nevertheless, the computer sector's sales value and export delivery value totaled 1.74 trillion yuan and 1.33 trillion yuan, up 9.6 percent and 7.8 percent, and the growth rates were respectively 0.3 percent and 0.5 percent smaller than that in January-September.

Driven by policies that focus on steady economic growth and expanding domestic demand, the electronics and IT industry's domestic sales increased 14.1 percent in the first 10 months to 3.18 trillion yuan, accounting for 46.3 percent of the industry's total; and the export delivery value increased 8.0 percent to 3.69 trillion yuan, with the growth rate 7.1 percentage points smaller than that in the same period of 2011. (Edited by Luo Jingjing, luojj@xinhua.org)

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