http://www.stcn.com/ | Shanghai-listed Companies Announce Third-quarter Results as High-end Manufacturing Industry Highlights the Significance of Heavy Equipment

Source: http://www.stcn.com/  Translated by the SSE

As of the evening of October 22, 110 companies listed on the Shanghai Stock Exchange have disclosed their third-quarter reports, 49 companies have disclosed their preliminary performance reports, and 225 companies have disclosed their performance forecasts (including the information disclosed in the prospectus of newly listed companies).

According to the data, over 90% of the companies achieved net profit growth, of which 236 companies had net profit growth of over 30%, and 178 companies had net profit growth of over 50%. The operating results of the third quarter were gradually announced, and the steady growth of Shanghai-listed companies was beginning to emerge.

The leading companies are the stable cornerstone

Up to now, a total of 50 leading companies with a market value of more than 50 billion yuan have disclosed their third-quarter reports or performance, all of which have achieved a year-on-year increase in net profit. Among them, 29 companies have a net profit growth rate of over 50%, and 17 companies have a growth rate of over 100%.

Facing the difficulties and challenges of the complex and changeable external environment such as the pandemic, leading companies in various industries have actively improved their business strategies to demonstrate their resilience. The new production capacity of Tongwei Co., Ltd., a leader in photovoltaic equipment, has rapidly ramped up and reached production requirements. The production and sales of the cell business are booming, and both operating income and net profit have doubled. WuXi AppTec, a leader in the biopharmaceutical industry, takes full advantage of its global presence, multi-location operations and full industry chain coverage. It is expected that its operating income in the first three quarters will increase by 71.87% year-on-year, and its net profit will increase by 107.12% year-on-year. Fuyao Glass, the leading auto glass maker, continued to increase the proportion of high value-added products and strengthened cost control and R&D investment. Its operating income increased by 19.16% year-on-year, and its net profit increased by 50.28% year-on-year.

In addition, the net profit of Zijin Mining and Northern Rare Earth, the leaders in the non-ferrous metal industry, increased by 47.47% and 47.07% respectively year-on-year. Shipping and port companies COSCO SHIPPING Holdings and SIPG expect their net profits in the first three quarters to increase by 43.73% and 32.40% year-on-year respectively.

High-end manufacturing highlights the significance of heavy equipment

Up to now, nearly 70 equipment manufacturing companies in the Shanghai market have disclosed their performance in the third quarter, and most of them have achieved double growth in revenue and profit, covering high-end equipment companies represented by rail transit equipment, ship equipment, aerospace equipment, photovoltaic equipment, and wind power equipment.

In recent years, the high-end equipment enterprises in SSE market have continued to make progress in tackling key problems in scientific research and technology, leading to significant improvement in the performance of relevant companies in the third quarter. Haitian Precision, a CNC machine tool manufacturer, overcame the impact of the epidemic and other unfavorable factors in the first three quarters, and continuously improved production efficiency by improving internal management, resulting in a steady increase in output and sales. Operating income and net profit increased by 17.81% and 48.29% year-on-year respectively. Times Electric, a rail equipment supplier, continued to stabilize the domestic market and actively developed overseas markets such as Asia, Europe, and America. In the first three quarters, its revenue increased by 27.56% year-on-year, and its profit increased by 29.97% year-on-year.

In addition, under the background of China's in-depth promotion of the strategy of carbon peaking and carbon neutrality, new policies and new concepts of green development continue to be implemented, driving the equipment production industry in related fields such as wind power and photovoltaics to continue to thrive. Among the Shanghai-listed companies, a number of wind power and photovoltaic companies have disclosed performance information for the third quarter. Among them, Mingyang Smart Energy has benefited from the continuous increase in the number of new tenders in the wind power equipment industry, as its orders and deliveries have grown significantly, and its net profit is expected to increase by 52.68% to 68.88% year-on-year. Photovoltaic equipment manufacturer LONGi Green Energy has benefited from the increase in downstream demand. The external sales of silicon wafers and modules have increased year-on-year, operating income has increased by 54%-56% year-on-year, and net profit has increased by 40%-48% year-on-year.

Telecommunications and electronics industries continue to boom

More than 40 companies in the telecommunications and electronics industries in the Shanghai market have disclosed relevant data for the third quarter, of which 29 companies have a growth rate of over 50%, and 14 companies have a growth rate of over 100%. In terms of telecommunications, the three major operators continued to grow steadily and continued to consolidate the construction of digital information infrastructure. China Mobile achieved operating income of 723.5 billion yuan and net profit of 98.5 billion yuan, up 11.5% and 13.3% year-on-year; China Telecom achieved operating income of 357.843 billion yuan and net profit of 24.543 billion yuan, up 9.6% and 5.2% year-on-year. According to China Unicom's September operation data, the "big connection" has reached a total of 841.584 million households, and the total number of IoT terminal connections has reached 366.126 million. In terms of innovative applications, the 5G industry virtual private network serves 2,785 customers.

High-efficiency information digital channels are running smoothly, and a group of software and hardware companies have deeply cultivated the technological advantages of their main businesses to achieve rapid development. HYGON, listed on the STAR Market, focuses on the research and development and design of high-end processors. During the reporting period, the company's leading edge in domestic high-end processors has improved. It is expected to achieve operating income of 3.820 billion yuan in the first three quarters, an increase of 180.88% year-on-year, and a net profit of 652 million yuan, a year-on-year increase of 424.16%.Montage Technology expects to achieve revenue of 2.881 billion yuan in the first three quarters, a year-on-year increase of 80.85%, and a net profit of 999 million yuan, a year-on-year increase of 94.94%, mainly due to the continuous shipment of DDR5 memory interface chips and memory module supporting chips, and the steady development of the Jintide CPU business.

The third-quarter performance forecast of the main board company Tony Electronics shows that the company's main businesses, including consumer electronics, photovoltaic, medical, and new energy, have improved. It is expected to achieve a net profit of 106 million yuan in the first three quarters, a year-on-year increase of about 289.13%.

The big consumer industry is gradually recovering

As the pandemic prevention and control situation gradually stabilized, consumption promotion policies continued to exert force, consumption potential in key areas was gradually released, big consumption industries continued to recover, and many industries achieved performance growth.

Since the third quarter, the monthly production and sales of automobiles have grown rapidly, showing a tendency of comeback of the peak season, driving the industry to stabilize and rebound. Up to now, 16 companies related to the automobile industry in the Shanghai market have disclosed their performance information for the first three quarters. Most companies have achieved performance growth year-on-year and quarter-on-quarter. For example, Great Wall Motors achieved a net profit of 8.16 billion yuan in the first three quarters, a year-on-year increase of 65.0%. While productivity improved, profitability continued to grow.

Export sales of the textile and apparel industry continued to grow, and the growth rate of domestic sales gradually improved. Many companies that have disclosed Q3 performance have achieved positive growth. For example, Sanfangxiang Group, a manufacturer of clothing raw material, received sufficient downstream orders in the first three quarters for its major product – bottle grade polyester chips. Thus, the sales volume and price have increased, and the net profit has increased by 67.37% year on year. Mobi Garden, a manufacturer of camping tents and outdoor apparel, will expectedly have a year-on-year increase of 81% on its net profit.

The food and beverage industry continued to maintain a steady growth. At the same time, new consumer demands on products such as snack food and instant food continued to open up space for industry development, leading the industry to develop sustainably and healthily. Anjing Food's traditional business, including quick-frozen hot pot ingredients and quick-frozen flour and rice products, grew steadily in the first three quarters. At the same time, emerging sectors such as pre-made dishes also developed rapidly. In the first three quarters, its revenue increased by 33.78% and profit increased by 39.62%. Dongpeng Beverage continued to expand its sales network. In the first three quarters, its operating income is expected to increase by 17.57% year on year to 19.52%, and its net profit will increase by 14.49% year on year to 18.11%.

Performance of the power industry has rebounded significantly

Up to now, 13 power companies on the SSE have disclosed their operating results in the first three quarters. Overall, the performance of the thermal power industry has improved significantly, and the clean energy industries such as hydropower and wind power have developed rapidly.

The operating performance of the thermal power industry has improved significantly. The thermal power industry represented by coal power is an important support for power supply in China. Previously, the thermal power industry was under pressure due to the continuous rise in coal price. Since the beginning of this year, along with the increase in domestic electricity demand and a series of policies to ensure coal supply and stabilize prices, thermal power companies have gained revenue from power generation, reduced their costs, and significantly improved their operating performance. For example, Inner Mongolia Huadian generated 46.181 billion kWh of power in the first three quarters, a year-on-year increase of 7.19%. The company achieved an operating income of RMB 17.237 billion, a year-on-year increase of 30.27%. It achieved a net profit of RMB 1.558 billion, a year-on-year increase of 537.22%. The performance improved significantly compared to the same period of the previous year.

At the same time, affected by increase in overall electricity demand, the clean power generation industries such as hydropower and wind power also showed good development. For example, Three Gorges Renewables Group has benefited from increase in electricity demand and gradual commissioning of new projects to generate electricity. Power generated in the first three quarters was 35.315 billion kWh, a year-on-year increase of 47.4%. Electricity generated from wind power, solar power and hydropower increased by 49.16%, 45.53% and 18.02% respectively, driving the revenue in the first three quarters to increase by 48.27% and net profit by 36.53% on year-on-year basis. In the first three quarters, Huaneng Hydropower completed hydropower generation of 79.290 billion kWh, a year-on-year increase of 5.46%. Its operating income and net profit increased by 8.16% and 22.68% year on year respectively.