Strong earnings of listed firms show resilience of Chinese economy

BEIJING, Sept. 2 (Xinhua) -- Listed companies in China reported a combined net profit of 3.58 trillion yuan (about 527.95 billion U.S. dollars) in the first half (H1) of 2026, up 19.5 percent year on year, according to a report by the China Association for Public Companies (CAPCO).

With the H1 figure surpassing 3.5 trillion yuan for the first time, the improving profitability of these companies, as the micro-level embodiment of the real economy, offers direct evidence of the resilience and vitality of the world's second-largest economy.

About three quarters of the 5,557 companies that had published H1 reports remained profitable. Growth also accelerated through the period, with second-quarter revenue and net profit both rising markedly faster than in the first quarter of 2026.

This earnings improvement mirrors the broader economic picture. Profits of China's industrial enterprises above the designated size rose 18.7 percent in the first half, while the overall economy expanded 4.7 percent during this period.

The recovery is structurally driven, with growth concentrated in new-economy sectors. Companies listed on the STAR Market, home to many of China's tech innovators, saw net profits soaring 4.4-fold year on year on revenue growth of nearly 40 percent, while those on the ChiNext board reported a 32.7-percent increase in net profits, with revenue up 22.3 percent. Private companies reported net profit growth of 29.6 percent in the first six months.

These gains were powered by hard-tech sectors, with net profits of integrated circuits growing 2.4-fold, according to the CAPCO report. The biopharmaceutical industry saw a net profit increase of 9.9 percent as domestically developed innovative drugs entered a commercialization window, and high-end equipment manufacturing reported revenue and net profit growth of 13.1 percent and 16.7 percent, respectively. More broadly, 10 of the 19 major industry categories reported simultaneous growth in both revenue and profit.

Behind these aggregate numbers are standout performers riding the artificial intelligence (AI) boom. CXMT, China's leading memory chip maker that listed on the STAR Market in July, reported H1 net profit of 77.6 billion yuan, recovering from a loss of 2.3 billion yuan a year earlier, with revenue surging 873.6 percent.

Foxconn Industrial Internet, a major AI server manufacturer, saw its net profit rise by 96 percent in H1. Zhongji Innolight, a leading optical module supplier with products essential to AI data centers, posted a net profit of 13.65 billion yuan, up 241.7 percent, while Cambricon, a homegrown AI chip designer, saw its net profit surge by 122.6 percent.

Gains extend beyond the tech sector. CATL, a world-leading electric vehicle battery maker, posted a net profit of 43.3 billion yuan in H1, up 42 percent. In the pharmaceutical sector, Zelgen Biopharmaceuticals reported an H1 net profit of 640 million yuan, its first profitable half-year, with revenue up 220.9 percent, as China's innovative drug industry matures.

The quality of earnings also improved. Research and development spending by listed companies totaled 847.3 billion yuan in the first half, up 3 percent year on year, with overall R&D intensity at 2.24 percent, according to the report. On the STAR Market, R&D intensity has exceeded 10 percent of revenue for several years.

Overseas revenue of 3,196 companies totaled 6.06 trillion yuan in H1, an increase of 22.9 percent, the CAPCO report noted, with 553 companies generating more than half of their revenue overseas.

The report also showed that 872 companies announced interim cash dividends totaling 740.3 billion yuan, while 1,051 companies planned share buybacks worth over 220 billion yuan, thus providing returns to investors.

Analysts expect this momentum to continue. Li Xunlei, chief economist at Zhongtai Financial International Limited, said the A-share market posted "steady revenue growth and notable earnings improvement" in H1, with corporate profitability rising steadily and business vitality being released.

He attributed this surge in profits across semiconductors, communications and electronics to the AI computing boom, a pattern he described as "one superpower with multiple strong players."

Stressing that the AI boom is "by no means a short-term bubble but a confirmation of a long-term industrial upgrade trend," with earnings spilling over from upstream to the broader real economy, Li forecast an increase of 12 to 15 percent in non-financial corporate earnings for the full year.

Ruan Xiaoqin, head of the policy research office at SWS Research, noted that A-share listed companies saw growth in both revenue and net profits, presenting a sound picture of overall recovery, structural improvement and renewed growth momentum. "Structural improvement was another keyword, with profit, industrial and market value structures all upgraded," she said.

She also said that non-financial manufacturing and hard-tech growth industries have become the main contributors to profit growth, adding that large-cap companies on the main board remain broadly stable, and that many small and mid-cap companies on the STAR Market and ChiNext have demonstrated growth potential.

Looking ahead, she said that with growth-stabilizing policies being implemented and domestic demand steadily recovering, the economy remains resilient and A-share earnings are expected to keep improving.