CICC: Performance certainty may be an important clue in the current uncertain environment

CryptocurrencySniper · 2026-04-07T02:31:53+00:00

CICC points out that in the current uncertain environment, performance certainty becomes an important clue. It is recommended to focus on industries with high prosperity and stable performance, such as AI-related and cyclical resource stocks. Although the market may still experience short-term fluctuations, after adjustments, A-shares may see a mid-term bottom, and profit growth in 2025 is expected to turn positive.

CryptocurrencySniper

2026-04-07 02:31:53

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CICC notes that earnings certainty may be an important clue in the current uncertain environment. While the short-term market still faces uncertainty, after the situation fluctuates back and forth, market sensitivity may decline, and after a period of adjustment, the current period may be a relatively low point for A-share mid-term performance. On the mid-term dimension, CICC believes that there has been no fundamental change in the macro environment in which the market is operating, so the logic supporting A-shares to “move steadily” still holds. Risk release and downward adjustments are expected to bring relatively good configuration opportunities. In an uncertain environment, earnings certainty may become a key clue for where capital flows in the market. It is recommended to focus on main themes with higher levels of business momentum and stronger earnings certainty. 1、Growth driven by improving business momentum: industries benefiting from AI technology being implemented, such as optical communications; and new energy-related batteries, energy storage, and so on. 2、Cyclical resource stocks: considering the position of the capacity cycle, focus on sub-sectors where supply-demand patterns support price increases and earnings certainty, such as power grids, chemicals, and so on. 3、High dividend yields: during stages when risk appetite is lower, there may be relative outperformance, but over the full year it may still be stage-based and structural performance; focus on alignment with cash flows.

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CICC: As annual reports are disclosed one after another, what’s the true quality?

In April, the peak period for earnings disclosures is about to arrive. As of April 3, 2026, about 16.2% of listed companies in the A-share market had disclosed their 2025 annual reports, similar to the progress during the same period in 2024. Combined with earnings quick reports, about 38.9% of listed companies had disclosed basic earnings information. In recent days, the market has been fluctuating significantly due to external uncertainty; attention to sectors with higher earnings certainty is expected to rise.

A-share profit growth for 2025 is expected to rebound, ending three consecutive years of decline. As of now (through April 3), among listed companies that have disclosed their 2025 annual reports or earnings quick reports, full-year net profit growth for 2025 is about 3.7%. Among them, net profit growth for financials/non-financials is about 6.8%/-0.5%, and net profit growth for the main board/ChiNext/STAR Market is about 2.6%/26.9%/28.3%, respectively. Previously, in the first three quarters of 2025, net profits for the whole A-share market/financials/non-financials increased by 5.4%/9.5%/1.7%, respectively. From macro data, full-year 2025 profits of industrial enterprises above designated size rose by +0.6%, slowing compared with the 3.2% growth rate in 1–9 months. In terms of prices, in the fourth quarter of 2025 the CPI continued to rise steadily and remained above zero, while the year-over-year decline in PPI narrowed. In terms of consumption, under the impact of the rollback of the “trade-in for upgrading” policy, retail sales of consumer goods (excluding motor vehicles) in January–December 2025 grew by 3.7% year over year, continuing to slow compared with the 4.5% growth rate in 1–9 months. In terms of real estate, in the fourth quarter of 2025 both sales volume and sales value saw their decline widen. For external demand, exports (in value) in January–December 2025 increased by +5.45% year over year, showing resilience amid uncertainty in external tariff policy. Based on the current disclosure progress, and considering that the base in the fourth quarter is relatively low due to asset impairment provisions in 2024, we expect full-year 2025 earnings growth to rebound and end the previous three-year consecutive decline. In our “CICC’s Outlook for the A-share Market in 2026: Proceeding with Determination,” we estimate from top down that full-year 2025 earnings growth for the whole A-share market/financials/non-financials is approximately 6.5%/9.0%/3.8%.

At the industry level, the number of industries with improved earnings is expected to increase. Non-bank financials continue to benefit from relatively high market activity. Within non-financials, non-ferrous metals and technology continue to serve as structural highlights, with industries such as steel and power equipment also seeing improved earnings. Based on currently disclosed data from listed companies’ 2025 annual reports or earnings quick reports, among 31 first-level industries, 18 industries saw their 2025 earnings growth rates improve versus 2024, accounting for more than half. Among them, industries such as steel, non-ferrous metals, electronics, computers, non-bank financials, power equipment, media, bio-pharmaceuticals, environmental protection, and basic chemicals have relatively high year-over-year earnings growth rates; while industries such as light industry manufacturing, commercial retail, real estate, building materials, building decoration, coal, and so on still have relatively large year-over-year declines in earnings. Specifically: 1）In some upstream areas, rising gold prices and the “anti-overcompetition” effect drive marginal improvement in certain industries. In 2025, amid disturbances from external uncertainty, gold prices continued to rise, lifting earnings in the non-ferrous metals sector. A low base and the anti-overcompetition effect drive earnings recovery in the steel and chemicals sectors. Steel benefits from lower raw material costs, and the chemicals capacity cycle is also nearing a turning point. 2）In some midstream areas, areas related to external demand and the anti-overcompetition effect show stronger resilience, while real estate- and consumption-related areas still need repair. In 2025, China’s exports demonstrated resilience amid uncertainty. Related industries such as home appliances and new energy are also supported by external demand. In addition, within the power equipment sector, photovoltaics benefit from the anti-overcompetition effect, while energy storage benefits from high business momentum in demand. As real estate transaction volume and prices remain weak, earnings performance in building decoration and building materials tends to be weak. Light industry manufacturing, which is highly linked to both real estate and consumption, saw a relatively larger decline in earnings. 3）In some downstream areas, consumption sectors overall still need improvement. In 2H 2025, retail sales growth gradually fell back after the rollback of the trade-in policy. Commercial retail, agriculture/forestry/animal husbandry and fisheries, and textile & apparel saw relatively large declines in earnings. 4）In the TMT segment, the AI industry trend continues to support demand growth. AI demand compresses capacity for consumer-grade storage products, driving a rapid rise in storage prices since the second half of 2025. At the same time, overseas demand related to AI remains strong; earnings in the electronics sector continue to grow at a high rate, and earnings in the computer sector have rebounded. Going forward, we will continue to monitor earnings disclosure.

In terms of allocation, earnings certainty may be an important clue in the current uncertain environment. While there is still uncertainty in the short-term market, after the situation fluctuates, market sensitivity may decline, and after a period of adjustment, the current period may be a relatively low point for A-share mid-term performance. From the mid-term perspective, we believe the macro environment in which the market is operating has not undergone fundamental change. The logic supporting A-shares to “move steadily” still stands, and risk release along with downward adjustments are expected to create relatively good opportunities for allocation. In an uncertain environment, earnings certainty may become a key clue for where capital flows in the market. It is recommended to focus on main themes with higher levels of business momentum and stronger earnings certainty. 1）Growth driven by improving business momentum: industries benefiting from AI technology being implemented, such as optical communications; and new energy-related batteries, energy storage, and so on. 2）Cyclical resource stocks: considering the position of the capacity cycle, focus on sub-sectors where supply-demand patterns support price increases and earnings certainty, such as power grids, chemicals, and so on. 3）High dividend yields: during stages with lower risk appetite there may be relative performance, but over the full year it may still be stage-based and structural performance; focus on alignment with cash flows.

Table 1: About 16.2% of 2025 annual reports disclosed

Note: Data as of April 5, 2026