China’s listed companies have forecast robust performance for the first half of 2024, further indicating a steady recovery in the wider economy.
As of July 15, more than 1,500 public firms have disclosed their earnings forecasts for January-June. According to financial data provider Wind, around 660 companies, accounting for over 40 per cent of the total, anticipated profit growth.
Industries including petroleum and petrochemicals, electronics, non-ferrous metals, and automobiles saw remarkable profit increases, emerging as the bright spot on the market, said Yang Chao, an analyst with China Galaxy Securities.
The encouraging corporate performance could be attributed to a favourable external environment, driven by better industrial conditions and increased market demand, analysts said. China’s new round of large-scale equipment upgrades, trade-in of consumer goods and the adoption of innovation-driven strategy by companies were pivotal in propelling growth.
The renewal program for equipment and consumer goods launched in March has unlocked new market demand and contributed to the upward profit trajectory for companies in related sectors. Zhejiang Dibay Electric Company Limited, which produces refrigerator and air conditioning compressor motors, exemplified the benefits of the policy, forecasting a net profit increase of over 150 per cent to nearly 180 per cent.
Many listed companies, spanning sectors from machinery to recycling, anticipated significant profit increases for the first half, citing opportunities arising from the demand for equipment upgrades. Shandong Linglong Tyre Company Limited and UniTTEC Company Limited are among the companies that expect strong demand in their respective markets.
Moreover, technology and innovation have also become new growth drivers for listed companies, in particular for those in the automotive industry. Substantial profit increases were seen in companies from new energy vehicle (NEV) manufacturers like Great Wall Motor Company Limited to upstream companies, such as Zhejiang Songyuan Automotive Safety Systems Company Limited.
Seres Group Company Limited, a traditional carmaker collaborating with Huawei on AITO cars, has turned a corner after four years of losses, predicting revenues of up to 66 billion yuan for the first half, surging by nearly five times from a year ago.
China’s NEV sector continued vibrant development this year, with production and sales reaching 4.93 million and 4.94 million units, respectively, in the first half, up 30.1 per cent and 32 per cent year on year. The strong performance of the NEV industry is expected to contribute to the overall economic recovery.
