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China stimulus slowly helps companies escape earnings funk

Chinese enterprises are beginning to crawl out of the slump that occurred last year, but most gains stem back to the government's stimulus spending, a Nikkei survey has found. As seen by the many automakers reporting losses in the January-March quarter, appetite for consumption in China continues to be weak. The aggregate first quarter profit dipped roughly 5% from a year earlier among 1,510 listed companies that released earnings forecasts for that period as of Thursday. That would mark an improvement from a double-digit plunge during the previous quarter ended last December. The companies surveyed by Nikkei represent 40% of the roughly 3,600 publicly traded Chinese enterprises, and excludes financial groups. Many companies indicate ranges in their guidance, and the 5% figure is based in part on averages of upper and lower extremes. Several industries benefited from public works investment and property redevelopment. Sany Heavy Industry, the big-name construction machinery maker, likely took in a net profit of 3 billion yuan ($446 million), or double from a year earlier. Unit sales climbed at peers XCMG Construction Machinery and Zoomlion Heavy Industry Science and Technology. All across the country, over 70,000 excavators were sold in the first quarter, an all-time high.