Profits of Chinese Industrial Enterprises Reached Fastest Growth in Over Two Years in April

On May 27th, the National Bureau of Statistics announced data: from January to April, the total profit of national large-scale industrial enterprises above a designated size 24358.4 billion yuan, a year-on-year increase of 18.2%, accelerating by 2.7 percentage points compared to January-March. In April alone, the growth was 24.7%, with momentum continuously accelerating.

In April, the profits of large-scale industrial enterprises across the country grew by 24.7%, with the growth rate accelerating significantly from 15.8% in March, reaching the highest level since November 2023.

However, what is more worth delving into for investors is the internal structure of the growth.

The two core engines driving profit growth are:

• High-tech manufacturing industry: a year-on-year increase of 44.8%, contributing 7.8 percentage points to overall growth

• Raw material manufacturing industry: a year-on-year increase of 88.1%, contributing 10.3 percentage points to overall growth

Together, they contributed 18.1 percentage pointsto the overall growth rate of 18.2%. In other words, if these two sectors are stripped away, Chinese industrial enterprise profits would be virtually stagnant—almost all the fruits of growth have been harvested by the upstream material chain related to AI and emerging industries.

Semiconductor materials: a breathtaking profit explosion

The most striking line in the data is: Electronics-specific material manufacturing industry profits increased by 601.7% year-on-year.

Optical fiber manufacturing increased by 347.6%, photonic device manufacturing increased by 51.0%, and the computer, communication, and other electronic equipment manufacturing sector as a whole increased by 1.1 times.

These three sets of numbers have a common narrative thread: The demand for upstream materials for AI computing infrastructure is exploding at a rate far exceeding market expectations. Data center construction drives optical fiber laying, AI chip packaging drives advanced substrate materials, and the iteration acceleration of GPUs and ASICs drives semiconductor specialty gases and targets - the common characteristic of these demands is virtually no substitutes, a long expansion cycle on the supply side, and pricing power highly concentrated in the hands of a few top suppliers.

Non-ferrous metals across the board are highly profitable, with AI demand being the strongest catalyst

Profits in the non-ferrous metal smelting and pressing industry from January to April increased by 1.2 times (120%) year-on-year, making it the industry with the fastest growth rate among all major sectors.

The statistics bureau is very direct about the reasons: The rapid development of emerging industries such as new energy, artificial intelligence, new generation information technology, and others has driven a significant increase in demand for non-ferrous metals such as aluminum, copper, gold, and lithium, pushing profits in the non-ferrous industry to grow by 117.8%.

Copper is a variety worth looking at alone. AI servers, data center power systems, high-end PCB copper-clad laminates - the consumption of copper is highly positively correlated with AI computing investment. The current high operation of international copper prices, coupled with the ongoing strong demand for AI downstream, has both the mining and processing segments of the copper industry enjoying the benefits of rising quantity and price.

Chemical and petroleum processing: price recovery begins a new cycle

The previously loss-ridden petroleum processing industry, from January to April, turned from loss to profit, achieving a total profit of 40.42 billion yuan. The chemical industry's profit growth was 73.4%, accelerating by 18.9 percentage points compared to January-March.

Behind this shift is the price gap repair driven by the rebound in international crude oil prices. A more important signal is: chemical products related to AI and new materials (such as electronic-grade epoxy resins, specialty resins) are