Chinese Companies listed on the ChiNext board of the Shenzhen Stock Exchange, the Star Market of the Shanghai Stock Exchange, and the Beijing Stock Exchange, which have smaller market valuations and focus on technology, outperformed the broader market, showing revenue growth of 9%, 4.9%, and 6.1%, respectively.
Mainland Chinese firms listed onshore reported to have a total net income of 3 trillion yuan (approximately US$420 billion) during the first half of the year. It is 2.5% increased from the same period last year, according to a report released by the China Association for Public Companies on Tuesday.
Approximately 60% of the 5,432 listed companies reported that they have an increase in revenue, while over three-quarters turned a profit. This report clearly demonstrates that companies have a more optimized business structure, a stronger focus on technology and innovation, and increased returns for shareholders in the first six months of the year, according to the association.
The aggregate revenue earned by non-financial enterprises was 30.42 trillion yuan. It is about the same level as the previous year. Their net income was 1.59 trillion yuan, which is a 0.9% increase from the last year.
Analyst Yuan Li from Soochow Securities stated that since the announcement of increased profits, optimism has been spreading uncontrollably.
This week, there are some companies that have reported lower earnings or even losses, including tech giants Huawei and ZTE, major banks, property developers, consumer goods retailers like Meituan and PDD, oil companies, and automakers BYD and Li Auto.
Kenny Ng Lai-yin, a strategist at Everbright Securities International, after seeing the overall statistics showing the stable performance of the A-share market in the first half of the year, is optimistic about it. However, the rate of profit growth was not particularly strong, indicating the economic fluctuations of recent years.
There is a strain on the company’s corporate profit growth, especially after the US President announced the global tariffs, accompanied by a slowing macroeconomy, and a relatively weak real estate market, he added.
Companies listed on the ChiNext board of the Shenzhen Stock Exchange, the Star Market of the Shanghai Stock Exchange, and the Beijing Stock Exchange, which have smaller market valuations and focus on technology, outperformed the broader market, showing revenue growth of 9%, 4.9%, and 6.1%, respectively.
The manufacturing sector has seen a growth in its income and net profit valued at 4.7% and 7.8%, respectively, in the first half of the year compared to the same period last year.
The consumer sector could see some growth, thanks in part to subsidies and trade-in programs. For example, electric vehicle manufacturers have a net profit growth of more than 30%, while home appliance companies have a profit increase of over 9%. Gaming firms and cinema operators experienced net profit growth of more than 70%.
In the first half, the income of export-oriented companies increased by 4.5% year-over-year to 4.9 trillion yuan. The shipbuilding industry demonstrated strong performance, with the value of overseas deliveries increasing by 38.6%. Overall, the industry has a decent revenue and profit growth of 23% and 135%, respectively.
By the end of August, 67 Chinese companies had completed their listings on domestic exchanges, with ChiNext, Star Market, and the Beijing Stock Exchange accounting for 66% of these new listings. Most of the newly listed companies belonged to the electronics and machinery industries, with new, emerging sectors and high-tech manufacturing contributing 90% of the total.
As of late August, 818 listed firms had announced dividend payments for the first half of the year. It represents a growth of 141 companies compared to the same period last year. State-owned enterprises accounted for 71% of the total dividend distribution, with 13 companies issuing dividends of more than 10 billion yuan each.
In the first half, listed companies also announced plans for share buy-backs of a total of 164.27 billion yuan.
In April 2024, the State Council released new policy guidelines, as Beijing was committed to tighter regulation of newly listed firms. This included restricting share sales by major shareholders and encouraging listed companies to increase their dividend payouts.