Profit surge for firms helps to boost emerging sectors

Chinese companies on ChiNext grow quickly as economic momentum rises

BEIJING — Nearly seven in having the potential to 10 Chinese-listed companies at least nearly double their net on the country’s Nasdaq-style profits in the first six months. board are poised to register The solar energy giant hefty profits for the first half of expects its net profits to surge this year. between 70 percent and 100

The data cast light on the percent year-on-year in the gathering momentum in first six months, due to rising emerging sectors and the solid outlays on research and development. economic fundamentals of the country. Smart manufacturing now

As of Monday, nearly 69 percent features on the company’s production of 64 Chinese publicly lines, reducing operational traded companies listed on the costs and improving ChiNext had forecast profit work efficiency. Moreover, growth or projected that losses strengthened efforts on new would be transferred to gains product design and upgrading in the January-June period. in tandem with stock option The figures were released by incentive plans sharpened Choice, a leading financial technological competitiveness. data provider. Zhejiang Jingsheng

Analysts stressed that profitability Mechanical and Electrical is of listed companies testimony to the performance offers insight into broader economic of Chinese companies that are performance. driving up the global value

Breakdown figures revealed chain as part of the country’s that only 12 companies, or 18.8 economic restructuring. percent of the total, are set to China is moving toward an witness a decline in profits or economyboostedbyconsumer report a loss for the first six spending, innovation and services, months. The remainders have reducing reliance on not made profit projections. investment and exports of low

Five listed companies, value-added goods. including Zhejiang Jingsheng Last year, Chinese Mechanical and Electrical, predicted companies reported listed brisk profit growth as they ramped up spending on research and development, with emerging sectors outperforming traditional industries.

Combined net profits from growth enterprises listed on the tech and emerging sectorheavy ChiNext board surged 36.7 percent in 2016 compared to the previous year.

That was faster than the 4.3 percent growth from publicly traded companies on the two main bourses in Shanghai and Shenzhen, according to data from Choice.

On a national scale, China’s research and development expenditure jumped 9.4 percent to 1.55 trillion yuan ($228 billion) last year compared to 2015.

That accounted for 2.08 percent of gross domestic product in 2016, data from the National Bureau of Statistics revealed.

Smart manufacturing and emerging sectors such as nextgeneration IT technology will embrace stellar growth in China over the next decade.

These sectors will all have complete supply chains that will attract massive investment, Guotai Junan Securities said in a report.

“China’s transition to slower but structurally rebalanced growth continues,” the World Bank said in a report.

Last year, China’s economy expanded 6.7 percent, the slowest growth rate in more than a quarter of a century. But tangible economic restructuring achievements are emerging.

Still, some industry observers cautioned that the process of transferring technological innovation into successful products for listed companies would be challenging.

“Industrial upgrading and increasing productivity will take many years of reforms, instead of being achieved overnight,” said Zhao Yuncheng, a senior official at the NBS.

Moreover, slightly tightened market liquidity and tougher supervision to ward off financial risk weighed on the performance of many listed companies, despite their surging profit growth.