BEIJING - Profits of China's major industrial firms dipped 1.1 percent year-on-year in the first five months of 2025, but steady revenue growth and improving industry performance signaled a more stable outlook.

Industrial firms with an annual main business revenue of at least 20 million yuan (about $2.79 million) saw their combined profits reach 2.72 trillion yuan during the January-May period, according to the National Bureau of Statistics (NBS).

The figure represents an increase of 603.41 billion yuan compared with the total profits recorded in the January-April period.

Operating revenue of these firms rose 2.7 percent year-on-year, and the steady growth is expected to support a continued profit recovery in the coming months, NBS statistician Yu Weining said.

ALSO READ: Official: China confident, capable to mitigate external economic shocks

Yu attributed the profit decline to a mix of factors, including insufficient effective demand, falling industrial product prices, and high base effects from investment income last year, which alone dragged down profit growth by 1.7 percentage points.

Despite the decline, several indicators pointed to improving conditions. The equipment manufacturing sector remained a key stabilizer, with profits rising 7.2 percent year-on-year during the period, and provided significant support to the overall industrial profit structure.

Seven out of eight sub-industries within the equipment manufacturing sector saw profit increases, with electronics, electrical machinery, and general equipment posting double-digit gains of 11.9 percent, 11.6 percent, and 10.6 percent, respectively.

Meanwhile, the aerospace, aviation and marine industries also posted rapid growth in the first five months, driving a 56 percent year-on-year surge in combined profits for the railway, shipbuilding, aviation, and aerospace sectors, highlighting the vitality of high-quality industrial development, Yu noted.

ALSO READ: China fully prepared for external shocks, premier tells enterprises

Notably, the country's intensified policy efforts on equipment upgrades and trade-ins have continued to boost demand. General and special-purpose equipment manufacturers posted profit increases of 10.6 percent and 7.1 percent, respectively, together contributing 0.6 percentage points to overall profit growth.

On the consumption side, the consumer goods trade-in program drove strong gains, with profits in smart consumer devices up 101.5 percent, other household electrical appliances up 31.2 percent, and kitchen appliances up 20.7 percent.

The country has earmarked 300 billion yuan in ultra-long special treasury bonds to support the program in 2025, with the first two tranches of the funding, totaling 162 billion yuan, issued in January and April. The third batch of the funding will be allocated in July to support the implementation of the program, according to the National Development and Reform Commission.

Broader industrial indicators have shown improvement. NBS data released earlier this month showed that China's industrial output rose 6.3 percent year-on-year in the first five months.

READ MORE: China's financial policy package injects cash and confidence to economy

In May alone, value-added industrial output increased 5.8 percent, fueled by solid growth in high-end manufacturing, the digital economy, and the new energy sector, all of which are driving steady industrial transformation and supporting overall economic growth.

Looking ahead, Yu emphasized the need to maintain proactive policy support, expand domestic demand, and accelerate innovation-driven industrial upgrades to sustain high-quality development in the industrial sector.