2024 Semi-Annual; China Listed Co. Growth.

The emphasis on technological innovation by listed companies has reached an unprecedented level, with continuous growth in R&D investment.

According to statistics from the Securities Times reporter, as of 8 PM on August 30, 2024, a total of 4,915 A-share listed companies had disclosed their R&D investment situation for the first half of 2024, with a combined amount of 712.5 billion yuan, a year-on-year increase of 3%.

In terms of the scale of R&D investment, among the 31 first-tier industries of Shenwan, 14 industries had a total R&D expenditure exceeding 10 billion yuan, and 7 industries including electronics, automobiles, power equipment, computers, pharmaceuticals and biology, communications, and building decoration exceeded 50 billion yuan. Among them, the electronics industry had the highest total R&D investment of 92.9 billion yuan, a year-on-year increase of 8.53%, ranking first; the fastest growing R&D investment was in the communications industry, with a total investment of 52.9 billion yuan in the first half of the year, a year-on-year increase of 12.24%.

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Looking at the intensity of R&D investment (the proportion of R&D expenditure to operating income), the R&D investment intensity of 5 industries including computers, national defense and military, electronics, mechanical equipment, and pharmaceuticals and biology all exceeded 5%. Among them, the computer industry was the highest, with the industry's R&D investment accounting for 10.72% of revenue in the first half of 2024. In terms of trading boards, the STAR Market, known as the hub of "hard technology," has an R&D investment intensity of 11%, the highest among the trading boards.

In terms of absolute amounts, in the first half of 2024, there were 1,125 listed companies with R&D investment exceeding 100 million yuan, 95 with over 1 billion yuan, and 4 with over 10 billion yuan. Among them, BYD's R&D investment scale ranked first, with an amount of 20.177 billion yuan, a significant increase of 41.64% compared to the same period last year, setting a historical high. This figure is much higher than the company's net profit of 14.113 billion yuan for the period. The announcement shows that in the first half of the year, in the field of new energy vehicles, the company deeply cultivated core technology areas, accelerated the launch of a series of globally leading forward-looking and disruptive technologies, from electrification to intelligence, gradually building a unique competitive edge; in terms of secondary battery charging, product research and development and capacity improvement progressed smoothly during the period, and the technology scale continued to lead the country.

China Mobile ranked third, with R&D expenditure reaching 14 billion yuan, a year-on-year increase of 46.42%. In the first half of the year, the company vigorously promoted investment layout in strategic emerging industries and future industries such as artificial intelligence, integrated space-ground networks, basic software, and advanced manufacturing, promoting the synergy of industry and investment. At the same time, it continued to deepen innovation cooperation, jointly with leading enterprises, universities, and research institutes, to continuously deepen the integration of industry, academia, research, and application innovation.

It is worth noting that central and state-owned enterprises continue to lead the way in R&D, with 7 of the top 10 being state-controlled enterprises, including 6 "China" enterprises. Among private enterprises, in addition to BYD, CATL and Midea Group's R&D expenditures are also among the top, reaching 8.6 billion yuan and 7.7 billion yuan, respectively.

In terms of R&D intensity, among the top 100 listed companies, 86 are concentrated in 4 industries: computers, pharmaceuticals and biology, electronics, and national defense and military. The total R&D investment of the top 100 companies is 21.9 billion yuan, accounting for more than 65% of operating income. Nevertheless, it should be recognized that this is mainly due to the lower scale of operating income, with only half of the top 100 companies reaching the scale of 100 million yuan in operating income. If considering both the scale of R&D investment and R&D intensity, there are 11 listed companies with R&D investment exceeding 1 billion yuan and the proportion of R&D investment in operating income exceeding 20%, including ZTE, iFLYTEK, BeiGene, and Hengrui Medicine, etc.

As a leading enterprise in the communications industry, ZTE has always attached great importance to independent research and development and maintains high-intensity R&D investment. The R&D investment in the first half of the year reached 13.4 billion yuan, accounting for 21.49% of operating income. Facing the global development trends of digitalization and green and low-carbon, the company continues to strengthen the competitiveness of DICT end-to-end full product series and digital intelligent solutions, has accumulated several key technologies in the field of artificial intelligence, and continuously optimizes the market pattern.

CICC Research believes that technological innovation is an inherent requirement for China's high-quality development. Only by accelerating technological innovation can a country enhance its irreplaceability in the industrial chain, which is conducive to improving the security of the industrial chain. China is currently facing a major change that has not been seen in a hundred years, facing increasingly fierce global technological competition, and future technological progress will rely more on independent research and development. Especially through technological innovation in frontier fields, it continuously enhances the competitive strength of enterprises.