Goldman Sachs Group (335.35,7.67,2.34%) estimated that the net profit growth of Chinese Listed Companies in the first quarter of this year will reach an “eye-catching” 55%. Thanks to the continuous recovery of China’s economy, cyclical companies will drive this growth.
‘after soaring commodity prices and a rebound in foreign demand, some companies in cyclical industries are likely to double their net profits from the year-on-year downturn,’ Goldman’s strategist, led by ginger Lau, wrote in a report on Thursday. They also forecast that profits in the so-called new economy industries in China, including technology stocks, are expected to grow 48% year-on-year.
“The stock cycle has moved into a growth phase, and profitability is often the main driver of returns,” Goldman analysts wrote. This is probably one of the most important earnings seasons in recent years. ”
According to the report of Goldman Sachs, companies accounting for 64% of the total market value of Chinese listed companies will report their first quarter results in the next two weeks. Investors will focus on whether the company can achieve profits in line with the current valuation.
Goldman said value stocks should continue to outperform growth stocks, adding that profits in sectors such as energy, semiconductors, hardware and materials could surprise investors, while profits from brokers, real estate, insurance and consumer services companies could fall short of expectations.