Mid-Year Dividends; 24 Firms, 13B Yuan.

On September 1st, the China Association for Public Companies released the semi-annual business performance report for Chinese listed companies in 2024. As of August 31st, excluding those that have announced plans to delay disclosure and delisted companies, a total of 5,340 listed companies in the domestic stock market (Shanghai, Shenzhen, and Beijing stock exchanges, hereinafter referred to as the "whole market") disclosed their semi-annual reports for 2024.

The report shows that in the first half of 2024, the listed companies in the whole market achieved a total operating income of 34.89 trillion yuan, with a net profit of 3.13 trillion yuan. 3,032 companies saw positive revenue growth, and 4,141 companies achieved profitability, accounting for 78%. The listed companies on the Growth Enterprise Market (GEM) and the Science and Technology Innovation Board (STAR Market) achieved an overall revenue growth of nearly 3% in the first half of the year. Excluding the financial industry, the physical listed companies achieved a total revenue of 30.35 trillion yuan and a net profit of 1.74 trillion yuan. The revenue for the first and second quarters was 16.90 trillion yuan and 17.99 trillion yuan, respectively, with a sequential increase of 6.43% in the second quarter. The net profit for the first and second quarters was 1.54 trillion yuan and 1.58 trillion yuan, respectively, with a sequential increase of 2.75% in the second quarter.

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Looking at the company types, in the first half of the year, the listed companies controlled by state-owned enterprises showed relatively stable performance, with revenue and net profit increasing by 0.09% and 3.09%, respectively. The revenue of private listed companies grew by 3.34% year-on-year. Among the 19 major industries, 17 industries achieved profitability, 9 industries saw positive revenue growth, and 8 industries had positive net profit growth. All sub-industries in the manufacturing sector achieved profitability, with 5 sub-industries achieving double growth in both revenue and net profit.

The overseas market has become a new growth point. Consumer demand is gradually being released. The government has introduced a series of subsidy and preferential policies to promote the recovery of the consumer market. The net profit growth of listed companies in various industries such as food and beverages, home appliances, etc., exceeded 8%. The agriculture, forestry, animal husbandry, and fishery industry turned losses into profits, and the breeding industry benefited from the cyclical recovery, with a significant increase in net profit. The consumer electronics, textile and apparel, and automotive industries have seen a significant improvement in prosperity, with the automotive industry's revenue growth exceeding 8% and net profit growth exceeding 20%.

The enthusiasm for online consumption is high, and the volume of express deliveries continues to grow rapidly. Although affected by the decline in unit prices, the overall revenue growth rate of the top five express companies still exceeds 10%, with 4 companies seeing a profit growth of over 20%. The enthusiasm for offline travel remains unabated, with net profits in the hotel and catering, tourism, and transportation services industries recovering well, with year-on-year increases of 38.01%, 13.60%, and 9.82%, respectively.

The performance of industrial production is significantly differentiated. In the first half of the year, the net profit of the upstream mining industry and the electricity, heat, gas, and water production and supply industry increased by 1.36% and 17.84%, respectively. The overall profit of the manufacturing industry has declined, with industries such as electronics and light manufacturing achieving better growth, with net profit growth exceeding 15%. The asset turnover rate of the manufacturing industry in the first half of the year was 0.32, a decrease of 0.02 compared to the same period last year, indicating a decline in capacity utilization. The revenue and net profit of the special equipment manufacturing industry increased by 2.73% and 1.13%, respectively.

The pace of companies going global is accelerating, and the model is upgrading. In the first half of the year, listed companies achieved overseas business revenue of 3.83 trillion yuan, a year-on-year increase of 12.84%, with the growth rate increasing by 9.93 percentage points, and the proportion of overseas business revenue accounted for 10.98%, an increase of 1.39 percentage points. Among them, the overseas business revenue of the manufacturing industry increased by 11.61%, with the growth rate increasing by 7.57 percentage points, and the proportion accounted for 18.91%, an increase of 1.73 percentage points. From the "new three" to multiple industries such as electronics and biopharmaceuticals, from simply exporting products to the overseas layout of the industrial chain, listed companies are accelerating the layout of globalization and upgrading the industrial competition model, establishing advantages in the overseas market.

New engines are fostering the development of new drivers. Technological innovation empowers deeper transformation. Listed companies have increased their R&D investment in new technologies and products. The total R&D investment in the first half of the year was 0.75 trillion yuan, a year-on-year increase of 1.3%, which has continued to grow for many years, although the growth rate has slowed compared to the previous year. The overall R&D intensity was 2.15%, an increase of 0.06 percentage points compared to the same period last year. The R&D intensity of the GEM, STAR Market, and Beijing Stock Exchange was 5.02%, 11.61%, and 4.87%, respectively. Strategic emerging industries, high-tech manufacturing industries, and industries such as computers, electronics, and mechanical equipment have shown vigorous innovation vitality, with R&D intensity reaching more than 5%. BYD, China State Construction Engineering Corporation, China Mobile, and ZTE Corporation have R&D investments exceeding 10 billion yuan, and 943 companies have R&D intensities exceeding 10%.New momentum and new advantages are being rapidly cultivated. Emerging technologies such as artificial intelligence, big data, and the Internet of Things are developing rapidly, with the acceleration of technological applications and iterative updates, bringing new development opportunities for the consumer electronics and semiconductor industries. The revenue of listed companies in these two industries has increased by 18.98% and 21.68% respectively, with net profit growth of 23.75% and 0.40%. Amidst the recovery of demand in terminal consumption and network communication markets, and the acceleration of computing infrastructure construction, the computer, communication, and other electronic equipment manufacturing industries are showing strong growth momentum, with revenue and net profit increasing by 9.68% and 11.57% year-on-year respectively.

Green and low-carbon development highlights the quality of high-quality development. Clean energy substitution has become a key focus of the "energy revolution," with revenue from clean energy sources such as hydropower, nuclear power, and wind power all showing certain growth. The new energy vehicle industry maintains robust growth with strong production and sales, with revenue growth exceeding 20% and net profit growth exceeding 30%, benefiting companies throughout the industry chain. Although some industries show phased capacity release and internal competition, the long-term development expectations remain unchanged.

The digital and intelligent transformation is accelerating. From traditional industries such as mining and breeding to emerging industries like high-end equipment and green environmental protection, listed companies are actively building digital and intelligent platforms and adopting digital marketing methods to improve production efficiency and operational service capabilities, accelerating the transformation and upgrading of the company. Data elements have become an important productive force. In the first half of the year, the three major operators actively promoted the development of cloud computing and computing power services, AI, quantum, and other new quality productive forces, further increasing the penetration rate of 5G, providing technical support for the digitalization of multiple industries across society. The total revenue of digital-related businesses reached 264.3 billion yuan, a year-on-year increase of 9%.

Dividends and share buybacks promote value enhancement.

The market structure continues to optimize. As of August 31, 59 new initial public offering companies have been added this year, with the proportion of new companies in the three emerging sectors of the Growth Enterprise Market, the Science and Technology Innovation Board, and the Beijing Stock Exchange reaching 71%. A total of 47 companies have been delisted, including 2 companies that were forcibly delisted for major violations and 10 companies that were forcibly delisted for financial reasons. Diversified delisting channels have been further smoothed, and an orderly market pattern with controlled entry and exit is gradually taking shape. Under the encouragement of various policies, listed companies are actively upgrading technology and integrating industries through mergers and acquisitions, with a wave of mergers and acquisitions emerging in strategic emerging industries such as new energy and biomedicine.

The combination of dividends and share buybacks sends a positive signal to the market, promoting the return of listed company value. As of August 31, 677 listed companies announced cash dividend plans for the first quarter and the first half of the year (including special dividends), nearly 500 more than the same period last year, with 80 companies on the Science and Technology Innovation Board distributing dividends in the middle of the year, five times that of last year. The total cash dividend amounted to 531.2 billion yuan, with a dividend payout ratio of 31.74% for the companies distributing dividends, enhancing the stability of dividends. Among the dividend-paying companies, 11 companies distributed dividends exceeding 10 billion yuan, with nearly 30% of state-controlled listed companies contributing over 80% of the total dividend amount, setting a benchmark for returning to investors; 6 private listed companies distributed dividends exceeding 1 billion yuan. More than 480 companies distributed dividends for the first time in five years for the half-year (quarter), and the number of companies distributing dividends multiple times a year is gradually increasing, with the awareness of returning to investors becoming stronger.

1,784 companies announced share buyback plans, with a total buyback amount of 93 billion yuan. Excluding cases where buybacks were stopped, 1,263 listed companies conducted buybacks through centralized bidding transactions, with a total buyback amount of 80.9 billion yuan, of which 84% was repurchased with their own funds, and 3 companies' buyback amount exceeded 1 billion yuan. The cancellation-style buyback for reducing registered capital is becoming a trend, with a buyback amount of 12.6 billion yuan, promoting the enhancement of corporate value.