China's state-owned enterprises directly under the central government have reported a sharp profit decline of 26 percent in the first 11 months this year.

Statistics show the combined profits of the giant state-owned enterprises stood at 683 billion yuan or nearly 100 billion U.S. dollars from January to November, 240 billion yuan less year on year.

Most of the loss came from petroleum and electricity industries, which suffered from government capped pricing system.

Director of the State-owned Assets Supervision and Administration Commission, Li Rongrong, analyzed the difficulties that these enterprises are facing.

"Some state-owned enterprises have seen more inventories, waning profitability and inadequate operating capital."

Analysts believed that a number of state-owned enterprises were having a hard time due to fluctuating energy and raw material prices, shrinking market demands and investment losses.