Abstract
Full A performance:
First quarterMrqfreespinsThe overall operating situation of listed companies is under pressure, and the income growth rate turns negative. The growth rate of all-A revenue in the first quarter of 2024-1Mrqfreespins.17% (0.58% in the fourth quarter of 2023), the growth rate of all-A net profit was-4.35% (3.54% in the fourth quarter of 2023). The further decline in demand has led to negative revenue growth, and the necessity of the "equipment renewal and trade-in" policy has increased to observe the effect of the policy on boosting domestic demand.
In the first quarter, the operation of foreign capital improved; the performance of state-owned enterprises was steady, with a small decline; and the income of private enterprises improved slightly, but their profits fell sharply.
In the sector, the performance of TMT technology income rebounded significantly; under the low base of the epidemic, the growth rate of downstream consumer profits recovered normally, but the income remained low; however, the performance of finance, upstream resources, mid-stream manufacturing and mid-stream materials declined.
All-A non-financial ROE:
In the first quarter, all-A non-financial ROE continued to decline. 2024Q1 all-A non-financial ROE (TTM) is 8.48%, slightly lower than 2023Q4 0.48pct. According to DuPont analysis, the decline in net interest rate on sales and the decline in asset turnover mainly led to the decline in ROE. Domestic PPI and CPI remained depressed compared with the same period last year, the decline in gross profit margin dragged down the net profit rate of sales, and the relative weakness of the income end led to a decline in asset turnover and a slight decline in asset-liability ratio.
Industry Segmentation:
In the first quarter, electronic (optoelectronics, consumer electronics, electronic chemicals, semiconductors, components), social services (sports, tourism and scenic spots, hotel catering), light industrial manufacturing, food and beverage, automobile (auto parts, commercial vehicles), petroleum and petrochemical, household appliances. Industries with declining performance include building materials, computers, real estate, steel, power equipment, coal, media and so on.
At this stage, the importance of the income boom is higher than the performance boom, recommend the subdivision of the rising income, external demand-driven electronics, domestic demand under the influence of the travel chain and cars. The high performance of some industries is more attributed to lower costs, and the flexibility and sustainability of their future performance remains to be seen. Through income improvement to drive performance improvement, its future performance may be more sustainable.
Electronics: led by exports, the income and performance of the electronics industry and all its secondary industries have rebounded significantly. According to the financial data of the first quarter of 2024, the revenue of the electronics industry grew by 13.4% and the net profit grew by 82.3%. Compared with 2023, the operation situation has been greatly improved. Under the electronics industry, all secondary industries have achieved signs of overall recovery.
Tourism and prosperity: recovery after the epidemic, the income and performance of the travel chain represented by "play" continue to pick up, and the recovery structure is healthier and more sustainable. In the first quarter of 2024, revenue from tourism and scenic spots grew by 45.5%, net profit grew by 81.0%, industry income and performance maintained a high growth rate, the recovery structure was sound and healthy, and sustainability is expected to be strengthened.
Electric passenger cars: a large part of the high boom comes from the substantial increase in sales of domestic new energy vehicles, benefiting from the increase in income growth, the price change has little impact at present. In the first quarter of 2024, revenue grew by 3.1% and net profit by 8.2%.
Risk hints: overseas economic downside risk, geopolitical risk, data statistics error risk, industry policy risk
1. Total: the growth rate of enterprise income turns negative in the first quarter, which is a drag on performance.
In the first quarter, the overall operation of listed companies was under pressure, and the further decline in demand led to negative revenue growth. Observe the effect of the policy of "equipment renewal and trade-in" on domestic demand.
The growth rate of all-A revenue in the first quarter of 2024 was-1.17% (0.58% in the fourth quarter of 2023). Compared with 2023, the overall demand of domestic enterprises declined in the first quarter of 2024.
The growth rate of all-A net profit in the first quarter of 2024-4.35% (3.54% in the fourth quarter of 2023), compared with 2023, the profitability of domestic enterprises declined slightly.
In the first quarter of 2024, all-A non-financial revenue grew by 0.79%, net profit by-5.16%, and net interest rate by 5.62%, which was lower than that in the first quarter of 2023 by 0.35pct.
In the first quarter, the operation of foreign capital improved; the performance of state-owned enterprises was steady, with a small decline; and the income of private enterprises improved slightly, but their profits fell sharply.
According to the attributes of the company, it can be divided into state-owned enterprises (central enterprises, provincial state-owned assets, local state-owned assets), private enterprises, foreign capital and so on. In the first quarter of 2024, the revenue growth rate of state-owned enterprises was-2.26%, the net profit growth rate was-2.48%, the revenue growth rate of private enterprises was 1.92%, the net profit growth rate was-15.12%, the profitability of private enterprises decreased, and the revenue growth rate of foreign-funded enterprises was 5.91%. The net profit growth rate is 7.95%, and the foreign capital operation situation has improved.
In the first quarter, the performance of TMT science and technology revenue rebounded significantly; under the low base of the epidemic, the growth rate of downstream consumer profits returned to normal, but income remained low; however, the performance of finance, upstream resources, mid-stream manufacturing and mid-stream materials declined.
In the first quarter of 2024, TMT technology revenue grew by 5.99% and net profit by 4.44%. Compared with 2023, the operation of the TMT sector picked up significantly; downstream consumer revenue grew by 0.55% and net profit by 15.16%. Compared with the first quarter of 2023, the epidemic policy has just changed, and the profitability of enterprises in the sector has recovered as scheduled, but the income growth rate remains low. Financial sector revenue growth rate-12.27%, net profit growth rate-3.42%; upstream resources revenue growth rate 0.11%, net profit growth rate-12.01%; mid-stream manufacturing revenue growth rate 1.58%, net profit growth rate-17.14%; mid-stream materials revenue growth rate-6.32%, net profit growth rate-24.86%.
2. ROE
In the first quarter, all-A non-financial ROE continued to decline, with upstream resources and mid-stream manufacturing as the main drag.
2024Q1 all-A non-financial ROE (TTM) is 8.48%, slightly lower than 2023Q4 0.48pct. In terms of sectors, upstream resources and industry are the main drag items; in the first quarter of 2024, energy / raw materials ROE (TTM) fell by 0.82 pct; industrial ROE (TTM) decreased by 0.67 pct; optional consumption / compulsory consumption ROE (TTM) decreased 0.29pct/ increased by 0.09 pct; financial ROE (TTM) decreased 0.56pct.
According to DuPont analysis, the decline in net interest rate on sales and the decline in asset turnover mainly led to the decline in ROE. In the first quarter of 2024, China's PPI remained depressed compared with the same period last year. In March, the PPI was-2.80% year-on-year, the net interest rate of all-A non-financial sales fell 0.35pct, and the turnover of all-A non-financial assets declined, resulting in a further decline in ROE (TTM) to 8.48%.
3. Industry Segmentation
In the first quarter, electronic (optoelectronics, consumer electronics, electronic chemicals, semiconductors, components), social services (sports, tourism and scenic spots, hotel catering), light industrial manufacturing, food and beverage, automobile (auto parts, commercial vehicles), petroleum and petrochemical, household appliances.
3.1 Electron
Led by exports, the income and performance of the electronics industry and all its secondary industries have rebounded significantly. Although global mobile phone shipments are still at the bottom of the cycle, the performance of electronics companies rebounded sharply in the next quarter driven by exports. According to the financial data of the first quarter of 2024, the revenue of the electronics industry grew by 13.4% and the net profit grew by 82.3%. Compared with 2023, the operation situation has been greatly improved. All secondary industries under the electronics industry have achieved signs of overall recovery, including optoelectronics (net profit growth of 90.4%, the same below), consumer electronics (50.4%), electronic chemicals (49.3%), semiconductors (48.8%) and components (34.4%).
Benefiting from domestic substitution, semiconductor equipment has made outstanding achievements. Despite the international pressure, the localization trend of the domestic semiconductor industry chain is obviously enhanced, and most of the new production lines use domestic equipment and materials, which drives the demand of domestic semiconductor equipment manufacturers. In the electronics industry, semiconductor equipment performed well, with revenue growth of 37.1% and net profit growth of 22.3% in the first quarter of 2024.
3.2 Social services
With the recovery after the epidemic, the income and performance of the travel chain represented by "play" continued to pick up, and the recovery structure was sound and healthy. After the epidemic, the sub-industries in the downstream consumer plate recovered and divided. Comparing the year-on-year breakdown of CPI, in March 2024, service CPI year-on-year 0.80%, consumer goods CPI year-on-year-0.40%, food CPI year-on-year-2.70%, service CPI year-on-year recovery is better than consumer goods and food. Comparing the performance of various industry segments, in the first quarter of 2024, the revenue of tourism and scenic spots grew by 45.5%, the net profit increased by 81.0%, the industry income and performance maintained a high growth rate, the recovery structure was sound, and the sustainability is expected to be strengthened; beverage and dairy revenue growth rate-1.7%, net profit growth rate of 45.7%, due to the low base of net profit, the industry net profit rebounded as scheduled under the decline of raw material costs. General retail net profit growth rate-19.3%, the recovery is weak.
3.3 Automobile
Electric passenger cars, as the top students in the high boom in the industry in 2023, declined in the first quarter of 2024, with revenue growth of 3.1% and net profit growth of 8.2%.
Electric passenger cars: a large part of the high boom comes from the substantial increase in sales of domestic new energy vehicles, benefiting from the increase in income growth, the price change has little impact at present. According to the China Association of Automobile Manufacturers, compared with sales from January to March in 2023, domestic sales of new energy vehicles increased by 31.8% in the first quarter of 2024 compared with the same period in 2023. However, under the slowing growth of the penetration rate of new energy vehicles and competition among car companies, the price of new energy vehicles fell 4.9% in February 2024 compared with the same period in 2023. Compared with the first quarter of 2023, the industry net interest rate increased slightly 0.14pct, the impact of new energy vehicle price reduction on performance growth is relatively less, mainly to observe the future sales growth.
3.4 Petroleum and petrochemical
Under the international bulk price rise, the performance of the upstream resources in the petroleum and petrochemical sector is more eye-catching. In the first quarter of 2024, the global manufacturing industry recovered, the conflict between Iran and Israel was superimposed, and international commodity prices rose sharply. Compared with the beginning of the year, international crude oil prices rose by nearly 19.7% in April. The performance of the domestic oil and petrochemical sector benefited, with revenue growth of 5.7% and net profit growth of 12.5% in the first quarter of 2024.
There are also growth segments with high scarcity in the traditional upstream industry, and their performance is eye-catching in the industry, offshore oil and gas and superalloys. Offshore oil and gas, ushered in the era of "gold mining", increasing reserves and production is the core strategy of the country and the industry. Oil and gas production will maintain strong growth in the future, and industry revenue growth is worth looking forward to. In the first quarter of 2024, CNOOC's revenue grew by 14.1% and net profit by 23.7%. Superalloy, which belongs to the subdivided industry "advanced metal materials", is mainly used in domestic aircraft and aero-engines. supported by national policies, the rapid development of China's aerospace industry drives the demand for superalloys, and the market is in a state of expansion. International competitors are unable to enter the domestic market, and the industry is growing well.
3.5 Mechanical equipment
In the first quarter of 2024, machinery and equipment revenue grew by 4.0 per cent (3.6 per cent in the fourth quarter of 2023) and net profit grew by 2.8 per cent (- 0.6 per cent in the fourth quarter of 2023).
The construction machinery industry has undergone a transformation, and with the global economic recovery, the future performance of the industry is expected to continue to be high. Reason 1: from the perspective of defense, the industry shows strong performance resilience during the downward period of the construction machinery market. In 2023, the construction machinery market is not as expected, but the industry performance is booming; in the first quarter of 2024, the domestic market of digging machines rebounded. The second reason: from the offensive perspective, the industry has been transformed, and globalization gives birth to the growth of the industry and weakens the periodicity. Under the strategy of Belt and Road Initiative and going out to sea, the construction machinery industry has changed, its periodicity has weakened, and its growth has been enhanced. At the bottom of the cycle, the industry is expected to set sail as the global economy recovers in the future.
Risk hint
1. Downside risks of overseas economy: due to the influence of geopolitics and macro policies, there are downside risks in overseas economy.
2. Geopolitical risk: the risk of aggravation of geopolitical contradictions caused by international politics
3. The risk of errors in data statistics: there is a risk of errors in data statistics when statistical companies report for the first quarter.
4. Industry policy risk: industry policy changes will greatly affect the future performance of the industry.