The disclosing of third-quarter reports in the Shenzhen market drew to a close on October 31, 2017, with 2051 listed companies releasing their earnings reports. The average operating revenue of listed companies in the Shenzhen market is CNY3.523 billion in the first three quarters, up by 25.6% compared with the same period in 2016, and average net profits attributable to shareholders of the parent company increase by 25.93% to CNY258 million compared with 2016. Excluding the financial industry, the average gross revenue of listed companies is up by 25.79% and net profits by 29.4%, reflecting the steadily improving performance of Shenzhen market-listed companies in the first three quarters of 2017 in a prosperous multi-layer capital market.
Third-quarter report reveals stably increasing earnings of listed companies benefiting from the effective supply-side reform.
Thirteen industries out of the 18 industries of the Shenzhen stock market report an increase of earnings for the first three quarters of 2017 compared with the same period of 2016. Manufacturing, construction, and transportation and warehousing industries, the pillars of the real economy, have registered year-on-year growth of 28.84%, 20.84% and 29.14% in gross revenues and 41.87%, 26.92% and 22.89% in net profits. Environmental protection, commercial service, and scientific and technological service industries see an increase of over 20% in total operating revenues while maintaining a double-digit increase in net profits.
The manufacturing industry, the backbone of the Shenzhen market that accounts for 1404 or 70% of the companies in the market, leveraging the supply-side reform and focusing on their main business, continues to boost total operating revenue and net profits more rapidly over the same period in 2016, with a sound momentum for future growth. The traditional sub-sectors including ferrous metal smelting, rolling and processing, non-ferrous metal smelting, rolling and processing, chemical materials and products manufacturing, chemical fiber manufacturing actively implement the supply-side reform, adjust the industry structure, and significantly improve their total revenue and net profits by more than 20% and 50% respectively. High-end manufacturing industries such as computer communication and electronic equipment manufacturing, electrical machinery and equipment manufacturing, and pharmaceutical manufacturing through technological innovation, optimization and upgrading, continue to increase market competiveness, boosting their net profits by 42.44%、29.35% and 20.88% respectively. The backbone industries of the real economy have dramatically improved their earnings, reflecting a stable and sound economy nation-wide.
The multi-layer Shenzhen market is prosperous.
By meeting the request to serve the real economy, deepening the financial reform, and consolidating the system base, The multi-layer Shenzhen market has been continuously improving and perfecting itself, with the main board, SME board and ChiNext board developing prosperously while maintaining their own characteristics.
First, blue chips show a strong growth momentum and SOEs continues to pursue excellence.
In the first three quarters of 2017, the average gross revenue of listed companies on the main board amounts to CNY7.953 billion with net profits of CNY531 million, both up by over 20% compared with the same period of 2016, the highest over the recent years. Blue chips are outstanding it their performance. Average operating revenue of the 10 best performing blue chips is CNY750.711 billion, and net profits are CNY96.048 billion, both up by over 20% year-on-year, to be specific, 22.55% and 24.68% respectively. For instance, BOE has been increasing efforts in indigenous innovation over the past few years, and has made a breakthrough in semiconductor displays and devices. Business grows dramatically in the first three quarters for BOE, with an increase of over 50% year-on-year in both operating revenue and net profits. Midea Group improves lean management in its household appliance division through scientific inputs, and is actively laying out the robot business to switch to high-end manufacturing via M&As. The total operating revenue of the Company is increase by 60.38% compared with the same period in 2016. GREE is fully engaged in its main business, witnessing a year-on-year increase of over 30% in operating revenue and net profits. The blue chips on the main board continue to grow and improve their performance by technological innovation, transformation and upgrading, showing a strong growth momentum.
The SOEs, which account for 60% of the listed companies on the main board, have achieved remarkable results by leveraging the capital market, actively exploring the mixed-ownership reform, and continuously improving their market operation. In the first three quarters, average revenue of SOEs on the main board amounts to CNY8.711 billion, up by 20.85% year-on-year; net profits are CNY542 million, up by 52.08% year-on-year, which is 16.96% above average level of the main board. SOEs continues to pursuit excellence by making use of the capital market, reinforcing resources integration, deepening the adjustment of the business layout and improving operating effectiveness. CNPCCCL, after its injection into JDEC as a whole, is enabled to integrate production with finance and to better coordinate the financial resources. The net profits of the company in the first three quarters are CNY4.996 billion, up by 26.96% year-on-year.
Second, SME board-listed companies speed up industrial upgrading by internal growth and external M&As.
As the breeding ground for industry leaders, SME board has accumulated a large sum of outstanding companies in the sub-divided industries that serves as role models. Over 60% of the SME board listed companies have increased both revenue and profits in the first three quarters. Performance of the SME board is stably improving during the reporting period, achieving average operating avenue of CNY3.031 billion and net profits of CNY228 million, up by 27.33% and 23.29% respectively compared with the same period of 2016.
The average operating revenue of the 686 high-tech companies on the SME board is up by 30.27% and net profits by 24.75% year-on-year, while the operating revenue of the 246 emerging strategic companies is up by 28.70% and net profits by 13.53%. Both of the high-tech companies and emerging companies have been actively implementing the national strategy to pursue innovation-driven development. By innovating technology, products and services, they effectively translate technology into productivity, which improves the core competiveness of the company and provided momentum for performance growth.
SME board-listed companies have been speeding up their business layout through internal growth and external M&As by leveraging the strengths of the capital market. Of the 79 companies undergoing restructuring in 2016, the average operating revenue is up by 52.22% and net profits by 41.62%, way above average level of the SME board in general. For example, WANGLIYANG and HAOXIANGNI achieved industrial integration through horizontal M&As, increasing their operating revenue by 72.59% and 196.5% respectively, and net profits by 161.29% and 494.8%.
Third, Strategic emerging companies on the ChiNext board in growing at a high speed.
In the first three quarters of 2017, ChiNext board-listed companies continue to grow rapidly, achieving average operating revenue of CNY1.083 billion, up by 32.77% compared with the same period of 2016, mainly profiting the rapid growth of strategic emerging companies.
The operating revenues of the 419 strategic emerging companies on the ChiNext board add up to CNY474.969 billion, up by 36.11% compared with the same period of 2016. Net profits total CNY45.667 billion, up by 15.83%. Excluding LETV, the average operating revenue of strategic emerging companies on the ChiNext board is up by 41.14%, and 21.53% year-on-year, way above the average level of the ChiNext board, manifesting the results of the ChiNext board’s focus on developing the strategic emerging industry. Subsectors such as new energy automobiles, energy-saving and environment protection and high-end equipment manufacturing have seen a prominent increase in net profits of 95.38%、49.79%、44.89% and 33.65% respectively. Net profits of SUNGROW POWER, ORIGIN WATER, MCST and SUNWAY COMMUNICATION is over CNY700 million, up by over 60% year-on-year.
Annual results of listed companies in Shenzhen market is expected to be positive.
As of October 31, 2017, a total of 919 companies in Shenzhen market have disclosed their earnings forecasts for the year. Of the 27 companies on the main board which have released earnings forecasts, 74% expect to maintain growth or to turn from deficits to profits. Of the 883 companies on the SME board having disclosed earnings forecasts, 87% expect to maintain growth or to turn from deficits to profits. Of the 9 companies on the ChiNext board having disclosed earnings forecasts, 89% expect to maintain growth or to turn from deficits to profits. That is to say, about 80% of the companies in Shenzhen market expect to achieve profitability, and the general prospects of the annual results are positive. The multi-layer Shenzhen market continues to develop stably to serve the real economy and implement the strategy to build an innovative country.
