Analysis of Financial Conditions of China’s Food Industry, from January to October, 2019

According to data from the National Bureau of Statistics, food industrial companies (excluding tobacco, similarly hereinafter) above designated size realized growths in total number, total assets, operating revenue, and total profit, and saw decreases in liquid assets, liabilities, selling expenses, and operational risks in China in the first ten months of 2019.
1. As for the number of companies, there were 369,800 industrial enterprises above designated size in China at the end of October, while the number of food companies above designated size was 36,552 (a year-on-year decrease of 10.00%) including 22,265 agricultural and sideline food processors, 8237 food manufacturers, and 6050 beverage enterprises (including liquor, beverage and tea)
2. From the perspective of assets condition, in the first ten months of 2019, total assets of food enterprises above designated size reached CNY6.2114 trillion, down 0.83% from the same period last year, contributing 5.29% of the total assets of all businesses above designated size.  The average assets of each company stood at CNY170 million, up 10.19% year-on-year, and it was 53.5% of that of enterprises above designated size. Total liabilities of food sector reached CNY3.1378 trillion, rising by 1.79% compared with the same period last year, and the asset-liability ratio registered at 50.52%, a significant growth. 
3. As business conditions concerned, in the first ten months of 2019, food sector realized operating revenue of CNY6.5584 trillion, down 4.37% year-on-year, total profit of CNY448.4 billion, a year-on-year decline of 0.08%. The loss increased by 3.74% from the previous year to CNY38.6 billion, and the income from investment stood at CNY26.9 billion, rising by 11.15% compared with the same period last year. As for profits, it was CNY134.22 billion for agricultural and sideline products processing, CNY130.14 billion for food processing, and CNY184.02 billion for beverage industry. From the view of investment income, it reached CNY6.4 billion in agricultural and sideline products processing, CNY13.1 billion in food processing, and CNY7.4 billion in beverage sector. In terms of profits from main business, it stood at CNY127.8 billion in agricultural and sideline products processing, CNY117.0 billion in  food processing, and CNY176.6 billion in beverage. 
4. From the perspective of operation and capital management efficiency in the first ten months of 2019, the operating profit margin of food sector was 6.84% (6.45% after deducting investment income); total assets profit ratio registered at 7.22%; the turnover of total assets and liquid assets respectively stood at 1.06 times and 1.86 times.
The profit margin was 3.58% in agricultural and sideline products processing, 8.42% in food processing, and 14.53% in  beverage sector.
5. Business operating costs in the first ten months of 2019, the operating costs of food sector stood at CNY5.4553 trillion, down 5.36% compared with the same period last year. And the expenses in selling, management, and finance totaled CNY586.7 billion, which included CNY338.5 billion of selling expenses (a year-on-year growth of 1.56%), CNY202.6 billion of management expenses (down 6.30% year-on-year), and CNY45.6 billion of financial expenses (decreasing by 16.28% from the same period last year). In addition, interest expense reached CNY44.9 billion, a year-on-year decline of 6.88%. 
6. Added value in the first ten months of 2019: the added value of food sector stood at CNY 1.4275 trillion, down 1.27% from the same period last year. The growth rate of sales registered at 21.77% in food industry, including 14.62% in agricultural and sideline products processing sector, 26.56% in food manufacturing, and 39.15% in beverage. The expenses in selling, management and finance accounted for 41.10% of the added value in food sector, and the proportions in agricultural and sideline products processing sector, food manufacturing, and beverage respectively reached 37.21%, 51.19%, and 34.80% .
7. Operation condition in October: the operating revenue of food sector reached CNY633.7 billion, down 5.36% year-on-year; the added value was CNY113.6 billion, increasing by  0.99% from the same period last year and 17.93% from the month before; the profits registered at CNY40.8 billion, decreasing by 0.24% year-on-year; the profit margin was 6.44%.
8. As for business risks, receivables (including bills receivable) and finished product inventory at the end of October totaled CNY 947.8 billion, up 5.39% from the same period last year. Risk assets in food sector at the end of October was 1.50 times (a year-on-year growth of 15.25%) of the operating revenue in the same month. By subdivided sectors, the month-end risk assets of agricultural and sideline product processing was 1.36 times (up 16.16% from the same period last year) of its operating revenue, and that in food manufacturing industry was 1.47 times ( down by 2.11% year-on-year) and 1.95 times (up 18.05% year-on-year) in beverage sector