Private companies fared poorly in '12

Problems concentrated in a few sectors; State firms prosper

China's large private-sector companies turned in a weak performance in 2012, with revenue growth slowing and profits contracting, the All-China Federation of Industry & Commerce said in a report on Thursday.

Large companies are defined as those with at least 7.7 billion yuan ($1.26 billion) in annual revenue.

Aggregate sales of the top 500 private-sector companies expanded 13.65 percent last year to 10.6 trillion yuan, compared with 33.25 percent growth in 2011 and 47.48 percent in 2010, the report said. Total profits dropped 3.39 percent, the first fall in four years.

The overall decline in profitability for what's usually the economy's most resilient sector was mainly due to a crunch in some major industries where private companies are concentrated, such as steel, shipbuilding and non-ferrous metals.

In 2011, there were 65 steel companies in the top 500, and steel was the largest industry on the list. In 2012, the number fell to 55.

Not all industries struggled amid the downturn. Construction companies occupied 65 spots in the top 500 list, up from 60 a year earlier, becoming the largest industry on the list.

But despite builders' strong performance, their profitability lagged far behind companies in the Internet and related service sectors, financial services firms and software producers. Companies in the Internet and related service sectors remained the most profitable.

According to the report, Suning Commerce Group Co Ltd, an electrical appliance retailer, was the largest privately owned company in China by sales.

It was followed by Legend Holdings Ltd, a conglomerate with business in the information technology, consumer and asset management industries, and Huawei Technologies Co Ltd, a network and communication equipment-based giant.