A-share listed firms' robust performance highlights China's economic resilience

BEIJING, Sept. 2 (Xinhua) -- China's economy grew at a relativelyslower pace, but semi-annual financial reports of domestically listedcompanies revealed great resilience and potential when transitioningfrom rapid growth to high-quality development.

As of Monday, 3,678 companies listed on the Shanghai and Shenzhenstock exchanges have released their interim financial reports, withtotal net profits of 2.14 trillion yuan (around 302 billion U.S.dollars), up 7 percent year on year, according to financial informationprovider Wind Info.

Among them, 87.7 percent earned profits while 56.7 percent reported higher year-on-year net profits.

Emerging industries such as communications, electronics andartificial intelligence posted strong growth, while traditional sectorssuch as steel and chemicals saw business falter.

Combined business revenue of 28 firms listed on the recently launchedscience and technology innovation board reached 32.96 billion yuan, up18 percent year on year, while their total net profit surged 25 percentto 4.56 billion yuan.

For example, Raytron Technology Co., Ltd more than doubled both its business revenue and net profit.

The fast growth came in as companies stepped up investments intoresearch and development (R&D), which accounted for 13 percent ofrevenue for the 28 firms on the sci-tech innovation board.

Companies in the strategic emerging sectors such as new materials andbiomedicine are also spending lavishly on high-end technology, with a30.21-percent year-on-year investment increase in R&D for 989 suchfirms listed on the Shenzhen Stock Exchange.

While registering robust growth, listed firms also maintained astable leverage ratio, adding to evidence that the country's key marketrisk has been gradually alleviated.

The overall debt-to-asset ratio of real economy enterprises on themain board of the Shanghai Stock Exchange was 62.39 percent, flat withthe same period last year.

Leverage in traditional industries decreased as the country steppedup efforts to cut outdated capacity, with the debt-to-asset ratio forthe coal and chemical sectors dropping by 1.14 and 0.15 percentagepoints, respectively.

China's economy grew at 6.3 percent year on year in the first half,within the government's annual target of 6 to 6.5 percent set for 2019.

The resilience of the Chinese economy and A-share companies'profitability has been strongly verified, and investor confidence hasbeen strengthened, said Essence Securities analyst Chen Guo.

"Based on the robust performance in interim reports, we adjusted upour profit forecast. We believe company profits have bottomed out in thesecond quarter and will continue to rise starting from the thirdquarter," said Li Shaojun, an analyst with Guotai Junan Securities.