Listed companies' strong performance mirrors China's economic growth
Companies listed on the A-share market reported better-than-expected performance in the first half of the year, a sign that the Chinese economy sustained its development momentum.
During the period, A-share-listed companies reported combined operating revenue of 34.54 trillion yuan (about 5.01 trillion U.S. dollars), climbing 9.24 percent year on year, data from the China Association for Public Companies showed.
Their net profits reached 3.25 trillion yuan, up 3.19 percent from a year earlier, according to the data.
Listed companies in general managed to sustain a growth trend despite unexpected challenges such as sporadic COVID-19 outbreaks at home and high inflation overseas, said the association.
The quality of listed companies has steadily improved and their structure has been further optimized, according to the association.
Non-financial listed companies posted higher-than-average growth in operating revenues and net profits during the period. Their revenues and net profits totaled 29.23 trillion yuan and 1.95 trillion yuan, respectively, increasing 10.89 percent and 4.55 percent.
Since the first quarter of 2021, non-financial firms have consistently posted higher growth in operating revenues than financial firms, official data showed, signaling a sound development trajectory of the real economy.
Industry-wise, coal, oil, gas, basic chemical, power battery raw material and photovoltaic new energy grew rapidly in the first six months, while firms in sectors such as aviation, catering and tourism faced challenges due to COVID-19 outbreaks and high raw material prices.
The new energy sector saw booming supply and demand, benefiting from the government's continued efforts to achieve its carbon peak and carbon neutrality goals, said Chen Li, chief economist with Chuancai Securities.
The rapid development of industries such as new-energy vehicles and wind power led to high profit growth of the non-ferrous metal sector, while high inflation overseas and an energy crisis in Europe contributed to the profit growth of firms related to coal, petroleum and petrochemicals, said Chen.
In the first six months of 2022, the average research and development (R&D) expenditure of listed companies accounted for 1.69 percent of their operating revenues. The R&D intensity of computing, bio-industry and high-end equipment manufacturing reached 10.29 percent, 10.1 percent and 6.84 percent, respectively.
The A-share market also emerged as a champion globally in initial public offering (IPO) financing scale in the same period, according to data from financial information provider Wind. It raised a total of 311.9 billion yuan via IPO, up 46 percent from a year ago and topping the global chart for financing scale.
Industry insiders have been optimistic about the prospects of the A-share market for a while now, as commodity prices started to decline at the end of the second quarter and the economy continued recovery in the third quarter.
Companies may report notable performance improvement, driven by higher profit margins, according to Sinolink Securities.