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Central state-owned enterprises (SOEs) have gained a profit of RMB 20.88 billion in June, an increase of 26.4 percent year-on-year, which is a record high monthly profit, as reported by the Yicai Media Group on Thursday.

The State-owned Assets Supervision and Administration Commission of the State Council (SASAC) released a report which stated that the central SOEs had achieved a cumulative profit of RMB 887.79 billion in the first half of 2018, an increase of 23 percent year-on-year. This growth rate is 2.1 percentage points higher than the figure in the first quarter of 2018.

Peng Huagang, a spokesperson of the SASAC, stated that the central SOEs received over RMB 88 billion from social fund through the property and the stock markets.

Peng believed that market-oriented debt-to-equity swap and mixed-ownership reforms are essential measures to lower the leveraging. The central SOEs have carried out market-oriented debt-to-equity exchanges worth over RMB 200 billion, with RMB 20.2 billion in new projects for the first half of 2018.

By the end of June, the average debt-to-asset ratio for the central SOEs amounted to 66 percent, a decrease of 0.3 percent from the beginning of the year and 0.5 percent year-on-year. Their total interest-bearing liabilities rose by 4.9 percent year-on-year, 3.9 percent lower than the equity growth rate.

Peng pointed out that the overall liabilities of the central SOEs had decreased steadily and the debt structure continued to be optimized, with simultaneous improvements in essential industries. For example, the industries with a high debt ratio, such as the metallurgy and power generation industries, have lowered their debt ratio significantly.

The central SOEs have completed their task of resolving overcapacity in the steel industry and fixed the 3.4 million tons of overcapacity in coal in the first six months of 2018. By the end of June, the central SOEs have retrenched 11,261 personnel, accounting for 21.58 percent of their total human resource.