China's real estate, media and photovoltaic (PV) industry saw strong growth of payment in advance in the first three quarters of 2015, pointing to optimistic performance of the companies in these industries for the whole year.
The real estate industry usually has a large amount of payment in advance compared with other industries mainly because of the forward housing sale mechanism. Data from Wind Information show that 142 listing real estate companies recorded an arithmetic average payment in advance of 7.697 billion yuan at the end of September, 33.4 percent more than a year earlier.
However, the industry's performance shows regional differentiation as the companies with main business in the first- and second-tier cities have realized better performance. The media industry also showed robust growth in advanced payment, as 71 listing media companies made arithmetic average payment in advance of 364 million yuan, rising 30 percent from a year ago, a sign of rapid development of the industry.
With government support, the media industry has seen steady and fast growth in the recent years. Taking net income as an example, listing media companies registered yearly net income growths of 26.79 percent, 24.13 percent in 2013 and 2014, and 28.93 percent in the first three quarters of 2015.
Moreover, arithmetic average payment in advance of the 16 listing companies in PV industry reached 155 million yuan, up 1.06 percent from a year ago, and their arithmetic average net income stood at 119 million yuan in the first three quarters, while it was negative 116 million yuan in the same time period of the previous year.
On the other hand, decline of advanced payment in coal, steel and some other industries may signal weakened performance for the year. The coal mining industry's 39 listing companies received an arithmetic average payment in advance of 499 million yuan during the reporting period, slipping 27 percent from a year ago.
China's economic slowdown and enhanced environmental protection severely affected energy-intensive industries, resulting in continuous drop of coal demand and coal prices. As the market turned from seller's market to buyer's market, it's almost impossible to collect payment in advance. Tracing back, coal industry experienced an obvious downward trend of arithmetic average advanced payment.
The figure was 852 million yuan, 897 million yuan and 935 million yuan in the first three quarters of 2011 to 2013, and the industry's net income in the years corresponds with the trend. For the iron and steel industry, 34 listing companies' arithmetic average payment in advance in the first three quarters fell 14.4 percent from last year to 1.589 million yuan, indicating disappointing earnings for the whole year.
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