AI and Domestic Substitution Drive Fastest Profit Growth in Four Years for Chinese Listed Companies
nashnova research
Profits across all 5,557 mainland-listed companies rose 19.5% year-on-year in H1 — the fastest pace since 2022 — as AI demand and Beijing's tech-self-reliance push funnelled gains into science and tech boards.
How fast is 19.5% profit growth, really?
All 5,557 A-share companies posted 19.5% year-on-year profit growth in H1, the highest since 2022.
This means → after three years of sluggish or negative profit growth, A-share earnings hit a clear inflection point.
But the headline number is an "average temperature" — the real story is in the divergence between sectors.
Which boards are pulling the average up?
The SSE STAR Market — home to chip makers and hard-tech firms — saw H1 profits surge more than fourfold year-on-year.
Shenzhen's ChiNext board posted 33% profit growth, also far outpacing the market-wide figure.
In plain terms = a handful of tech companies lifted the entire market's scorecard by a wide margin.
Why did tech explode while others lagged?
Two forces stacked: expanding AI demand + accelerating domestic substitution. Major tech platforms are rolling out AI applications and shifting to domestically made chips for computing power.
AI hardware firms such as CXMT (長鑫存儲) tapped capital markets to fund capacity expansion, amplifying the tech sector's earnings leverage.
This reflects Beijing's strategic pivot — once "tech self-reliance" became a top priority, both policy resources and market capital began flowing into tech in tandem.
What does "K-shaped divergence" mean here?
Industrial Securities analyst Zhang Qiyao said: "Tech and advanced manufacturing are becoming the new engines of China's economic growth."
The widening gap between tech-sector profit growth and traditional industries is a textbook sign of an economy shifting from credit-driven to innovation-driven growth.
In plain terms = like the letter K — one leg trends up, the other stays flat. Tech companies earn more and more; traditional sectors have not kept pace.
Can the momentum last into H2?
The mid-year earnings season wraps up this Tuesday; market focus is already shifting to two questions.
First, whether STAR Market and ChiNext can sustain their outsized growth rates in H2. Second, whether the depth and breadth of domestic substitution can justify current valuation premiums.
This means → H1 numbers are already priced in. What the market wants to see next is "sustainability of growth," not just "growth itself."
市场有风险，内容仅供研究参考，不构成投资建议。