Huatai Securities reports May industrial profits rose 21.1% YoY, easing from
April’s 24.7% but above Q1’s 15.5%; revenue growth continued to recover,
indicating broad improvement. Energy and AI-related chains were the primary
profit supports. A blockade of the Strait of Hormuz now exceeding three months
has intensified supply shocks, eroding capacity utilization at some mid‑ and
downstream firms and widening industry divergence. Oil prices edged down in May,
but upstream petrochemical profit growth remained elevated.
Electronics/computers, driven by strong global AI investment, led profit and
revenue gains; its contribution to aggregate industrial profits rose from 6.7ppt
to 9.6ppt. Nonferrous smelting and chemical products contributed 6.4ppt and
4.2ppt respectively; the three sectors together added about 20.2ppt.
Domestic-demand downstream manufacturing profit growth remained weak, with autos
and furniture seeing larger declines.
