Profits of China's major industrial firms declined 20.6 percent year on year from January to April, data from the National Bureau of Statistics (NBS) showed Saturday.

Industrial firms each with an annual main business revenue of at least 20 million yuan ($2.83 million) saw their combined profits reach 2.03 trillion yuan in the period, the NBS said.

A total of 13 out of 41 major industries saw growth in profits from January to April, the NBS said. The electricity and heat production and supply sector saw profits rise 47.2 percent, while the electrical machinery and equipment manufacturing industry reported a 30.1 percent hike.

Driven by the government's supporting policies, profits of the equipment manufacturing industry increased by 29.8 percent year on year, shifting from decline to growth. The sector was the largest driver of profits of major industrial firms, pushing it up by 6.4 percentage points.

Senior NBS statistician Sun Xiao said that as the economy speeds up its recovery, the decline in profits of industrial firms continues to narrow, but the recovery of their profitability still faces challenges from external uncertainties. 

Targeted policies are needed to stimulate the vitality of business entities, according to Sun.

Bruce Pang, chief economist and head of research in Greater China of JLL, predicts that the cumulative year-on-year growth of industrial firm profits is more likely to turn positive in the fourth quarter of the year. He told CGTN in a text message this will be driven by expanding domestic demand and the improvement of expectations.