As of October 31 all 176 companies listed on the Shenzhen Small and Medium Enterprise Market had disclosed their Q3 reports, which underscored increasing profit-making capabilities, sustained development of major businesses, steady growth of performance and active merger and acquisition among those firms.
Data show the business revenue of those listed SMEs averaged 845 million yuan in the first three quarters, with net profits, EPS and ROE at 58.34 million yuan, 0.34 yuan, and 9.17% respectively. With the expansion of market scale and M&A activities, a league of stellar performers stand out on the SME board, with 22 companies raking in a net profit of over 100 million yuan in the first nine months.
Meanwhile, their overall performance features high profit quality, on the back of sustained growth in major businesses. The non-recurring loss & profit in the period averaged 2.62 million yuan, about 4.5% of the total net profit, mainly concerning securities investment returns, government subsidies, disposal of illiquid assets, conversion of bad loan provisions, and capital appropriation charges.
In the Jan.-Sept. period, business revenue and net profit rose 28.34% and 38.78% on the whole. Of the 176 firms, 137, or 78% realized growth. In terms of net profit growth, 15 listed SMEs increased over 100%, 24 between 50%-100%, 39 between 30%-50%. The driving forces behind such impressive performance are their efforts in market development, cost control, technological innovation, and focus on major businesses.
owever, with robust growth come potential problems. More and more listed SMEs seek securities investment, attracted by the bullish stock market. Several others post high ratio of non-recurring loss & profit, which indicates poor sustainability in performance. Sources with the Shenzhen stock exchange expressed focus would be put on reviewing the Q3 reports of those companies.
