CHINA’S companies are forecast to turn in their biggest earnings increase in four years in 2014, as strong growth in the consumer, energy and industrial sectors propels overall profit at listed firms 19 percent higher than a year earlier.

    The expected improvement from an already solid 2013 showing comes as the government seeks to steer the world’s second-biggest economy to a consumption-led model from reliance on trade. Just completed earnings reports for 2013 showed overall income climbed 13.8 percent, boosted by consumer goods, materials and information technology firms.

    The consumer discretionary, energy and industrial sectors together make up around a quarter of total earnings for Chinese firms. They are expected to see 2014 net profit grow by an average of 42 percent, 5 percent and 44 percent respectively in 2014, according to data based on analysts’ forecasts for more than 1,500 Shanghai and Shenzhen-listed companies.

    “We expect to do a little bit better obviously in the consumer area. That’s a big focus for the government to try and re-balance the economy,” said Steve Brice, chief investment strategist at Standard Chartered Bank in Singapore.

    The three sectors, which comprise big names like oil and gas firm PetroChina Co. and airline Air China Ltd., as well as Peking duck restaurant chain China Quanjude Group Co., are expected to log the fastest profit rises since 2010.

    Companies such as Air China and highway operator Shenzhen Expressway Co., as well as Beijing Wangfujing Department Store Group Co. and home appliances maker Midea Group Co. are all expected to see better profit growth this year.

    “Consumers have been a long-term source of strength in the economy and there are still some cheap parts of the consumer market that we think you could find as an investor,” said Stuart Rae, chief investment officer at AllianceBernstein, a qualified foreign institutional investor in China.

    At financial and utilities companies, though, slower growth is expected this year. China’s easing economic growth is bringing caps on lending at banks, while government policies like electricity grid tariff cuts are weighing on power firms’ bottom lines.

    The financial sector, which contributes more than half of overall earnings among listed firms, is expected to post an average net profit growth of 10.3 percent. (SD-Agencies)