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China Industrial Profits Jump in May, Beat Forecast

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China's industrial profits unexpectedly jumped 15.5 percent in May from the same month last year, the National Bureau of Statistics said on Thursday, beating consensus forecasts.

Industrial firms in China generated profits of 470.6 billion yuan ($76.1 billion) in the month, bringing total profits from January-May to 2.08 trillion yuan, up 12.3 percent from the year-ago period.

The rise in May was substantially higher than the previous April's year on year rise of 9.3 percent, and much better than analyst expectations of 7-8 percent.

(Read More: China Industrial Profits to Show Worsening Economy)

Analysts had expected Thursday's industrial profits data to reflect concerns about a slowing growth in China, as the world's second largest economy struggles with weak demand and mounting inventories.

Concerns over the health of China's economy have escalated this year, after disappointing GDP growth of 7.7 percent in the first quarter of 2013 which came below expectations of 8 percent, reignited hard landing fears.

(Read More: Outlook for China's Economy Just Keeps Getting Worse)

Zhiwei Zhang, chief China economist at Nomura International, said market watchers should not read too much into the surprise jump in industrial profits.

"I wouldn't read too much into it. Monthly data is extremely volatile. The overall trend is that the economy is trending down due to policy tightening slowing growth," Zhang said.

(Read More: China January to April Industrial Profits Up 11.4% on Year)

"This is not a sign of a rebound. The leading indicators, including loan and credit growth are weakening," he added.

Alaistair Chan, economist at Moody's Analytics' Sydney office said policy tightening in China remained a key risk for its industry.

"While this is a good result and indicates that businesses in China right now are still on a good footing, the outlook is still negative. At least till the end of the year, because of the lack of support from the government in terms of stimulus," he said.

— Reuters contributed to this story.

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