Summary of Key Points
In the first half of 2026, the profits of industrial enterprises above designated size in our country increased by 18.7% year-on-year, accelerating by 3.2 percentage points compared to the first quarter, showing a trend of "stable progress with enhanced momentum." The growth was mainly driven by stable industrial production, rebounding prices of industrial products, and strong performance in the electronics sector (led by AI and computing power), as well as the raw materials manufacturing industry, which contributed significantly to new drivers of growth. At the same time, corporate costs continued to decline, improving profitability. However, companies still face challenges such as a complex external environment and insufficient market demand.
Detailed Analysis
The Two Main Drivers of Profit Growth: The Electronics and Raw Materials Industries
The core drivers of industrial profit growth in the first half of the year came from two sectors:
- Electronics Industry: Affected by the integration of AI and the surge in computing power demand, profits soared by 96.9% year-on-year, contributing 8.5 percentage points to the overall profit increase. Within this sector, profits related to servers increased by 689.3% (nearly sevenfold), and integrated circuit manufacturing saw a dramatic rise of 2579.5% (more than 25 times). In other words, if a company made 1 yuan last year, it made 26 yuan this year.
- Raw Materials Industry: Profits increased by 71.7% year-on-year, contributing 8.8 percentage points to the overall growth. Industries such as copper and aluminum saw a 99.4% increase due to improved demand, while the petroleum processing industry shifted from loss to profit, and the chemical industry grew by 67.8%. These two sectors combined accounted for nearly 90% of the profit growth, acting as the true "engineers" of this progress.
New Drivers of Growth: Small Industries with Great Potential
Subsectors related to new productive forces have shown rapid growth and become highlights in profit growth:
- Non-metallic Materials: Profits in recycled rubber manufacturing increased by 133.3%, and those in graphite and carbon products by 61%;
- Data Center Infrastructure: Fiber optic manufacturing profits rose by 410.4% (more than fourfold), and optical cable manufacturing by 39.8%;
- High-end Equipment: Additive manufacturing equipment (3D printing) grew by 55.4%, and specialized semiconductor equipment by 18.7%. Although these sectors are relatively small in scale, they are growing rapidly and represent key directions for future industrial upgrading.
Profit Growth Across Various Types of Enterprises
Enterprises of all types and sizes achieved profit growth:
- Enterprise Type: Profits of joint-stock companies increased by 24.7% (accelerating by 3.8 percentage points compared to the first quarter), while those controlled by state-owned enterprises grew by 17.9% (accelerating by 7.8 percentage points);
- Enterprise Size: Large enterprises saw a 20.3% increase, medium-sized enterprises by 21.3% (even faster than large enterprises), and small enterprises by 12.9%. Whether state-owned or private (joint-stock companies include many private firms), all types of enterprises are making profits, indicating overall vitality in the industrial sector.
Lowering Costs Makes Profit-making Easier: Continuous Improvement in Profitability
Companies are becoming more efficient in generating profits:
- The cost per 100 yuan of sales revenue decreased to 84.89 yuan, a reduction of 0.55 yuan from last year, and this trend has continued each month (for example, a decrease of 0.4 yuan from January to February and 0.5 yuan from January to March);
- The profit margin on sales revenue reached 5.7%, up 0.59 percentage points from last year, the highest level since 2024. In simple terms, for every 100 yuan in sales, companies are making an additional 0.59 yuan in profits.
Concerns Behind the Success: What Issues Need Attention?
Despite the rapid profit growth, there are still some challenges:
- External Environment: Unstable international commodity prices (such as oil and copper) can affect corporate costs;
- Internal Demand: Market demand is not strong enough, with some companies facing insufficient orders;
- Financial Pressure: Some enterprises are struggling with cash flow, which affects their ability to expand production.
Overall, the industrial profit growth in the first half of the year represents tangible progress. However, it is important to be cautious about potential risks and continue to take steady steps forward. From these data, it is clear that sectors such as AI, computing power, and new materials are emerging rapidly, indicating that the "new engines" of the industrial economy have already been ignited.