In mid-to-late April, it entered the intensive disclosure period of the first quarterly report. A-share listed companies will enter an intensive disclosure period of quarterly reports in mid-to-late April, and industries and individual stocks whose performance is expected to exceed expectations may become one of the main lines of investors' attention. The current quarterly report disclosure rate is low, with a disclosure rate of 2.6% as of April 14, and we combine the bottom-up forecasts of industry analysts to sort out a preview of the quarterly report for investors' reference.
In the first quarter of 2024, the growth rate of A-share non-financial earnings may be basically the same as that of the same period last year, and the revenue will be positive. The National Bureau of Statistics announced that GDP in the first quarter increased by 5.3% year-on-year, and nominal GDP increased by 4.2% year-on-year due to price factors, combined with the cumulative year-on-year growth of CPI in the first quarter and the year-on-year decline of PPI of 2.7%, we estimate from top to bottom that the non-financial revenue of A-shares in the first quarter may be a single-digit year-on-year growth. Some of the references include:
1) As of April 13, according to the incomplete statistics of A-share companies (about 822) covered by CICC, the year-on-year growth rate of A-share overall/non-financial earnings in the first quarter is forecast to be -1.3%/2.0%;
2) Since March, analysts' 2024 earnings forecasts for A-shares have been revised down by 4.7 percentage points, but the downward revision has improved from the beginning of the year;
3) From January to February 2024, the cumulative year-on-year growth rate of industrial enterprise profits was 10.2%, 6.6 percentage points slower than the growth rate in December 2023, but 12.5 percentage points higher than the annual growth rate in 2023, and the manufacturing profit was +17.4% year-on-year, which was the main driving item for the profit growth of industrial enterprises.
Resource commodities and export chains that are globally priced in the first quarter may perform better. Structurally:
1) The energy and raw materials sectors may continue to diverge. In the first quarter of 2024, domestic and foreign commodity prices will continue to diverge, and the global pricing of commodity prices (such as crude oil, industrial metals and precious metals, etc.) is expected to achieve significant growth in earnings compared with the same period last year, while commodity prices related to domestic demand or real estate may be relatively weak (such as ferrous metals, coal and building materials, etc.), becoming the main factor for the weakness of domestic PPI, and the earnings of related industries in the first quarter may be weaker than that of the same period last year.
2) The performance of the export chain industry remains resilient. Benefiting from the growth resilience of some overseas economies and the rebound of the inventory cycle, some industries that were dragged down by overseas destocking in the early stage may usher in improved demand, and the cumulative year-on-year growth of mainland export data in the first quarter turned positive, and it is expected that the export chain-related industries may benefit, but it is necessary to pay attention to the impact of the "price for volume" feature of exports on profit margins, as well as the impact of domestic sales of real estate chain-related industries.
3) Midstream manufacturing still needs to digest the problem of oversupply, and the performance of some leading companies in the photovoltaic and new energy vehicle industry chain may be relatively stable, but the industry as a whole may face a year-on-year weakening performance in the first quarter.
4) The performance of most downstream areas is expected to improve year-on-year. From January to March, the total amount of social zero increased by 4.7% year-on-year, and the compound growth rate showed a certain improvement trend.
5) The performance growth rate of the TMT sector is expected to improve under the effect of a low base. At present, the global and continental semiconductor sales cycle continues to rebound, but the elasticity of performance improvement in the sector may still be limited due to capacity utilization factors, Apple's industrial chain sales are also relatively sluggish, and the improvement in the performance of technology hardware may mainly come from a low base, and the contribution of AI-related applications to the performance remains to be seen.
What are the highlights of the segments? Combined with the bottom-up feedback from CICC industry analysts:
1) Energy and raw materials industry: oil prices are expected to improve under the influence of production cuts, oil and gas performance is expected to improve year-on-year, and chemical product profitability also benefits from the rise in oil prices, product prices and exports; non-ferrous metals are mainly affected by overseas economic resilience and geopolitical fluctuations, and the performance of gold stocks may exceed expectations; weak demand leads to relatively weak profits in steel, coal and building materials, and it is necessary to pay attention to the performance of some segments lower than expected.
2) Midstream manufacturing: the new energy vehicle industry chain is accelerating the bottoming under the influence of the off-season and price reductions; the performance of the main photovoltaic industry chain is still declining month-on-month, and the unit profit of each link may still show a downward trend, but the photovoltaic glass benefits from the tightening of the balance between supply and demand and the inventory consumption is expected to exceed expectations, and the inverter export boom is still high; the machinery industry as a whole has not yet seen an inflection point for demand improvement, but the counter-cyclical policy continues to be good for the subdivision of the machinery sector, and new quality productivity and artificial intelligence-related fields may benefit, such as humanoid robots, industrial machine tools, hydrogen energy, composite current collectors, etc.
3) Downstream consumption: The Spring Festival consumption has driven a steady recovery, and the performance of retail, tourism and other industries has improved marginally, but the persistence has remained to be observed since March, and the trend of downstream rational consumption and K-shaped differentiation has become prominent; light industry and daily chemicals, home appliances, textiles and clothing continue to benefit from the improvement of external demand and the improvement of overseas channel inventory; the domestic and foreign demand of the automobile industry is stable, and the performance growth of the industrial chain has been driven by going overseas. Among them, the performance of trendy toy faucets, beauty and medical beauty, upstream parts of air conditioners, and textile manufacturing is expected to exceed expectations, and the pig breeding industry is concerned about the inflection point of performance.
4) TMT field: the overall performance of consumer electronics in the first quarter was weak, the capacity utilization rate of semiconductor manufacturing is still declining, but semiconductor design is expected to benefit from the upward trend of consumer electronics cycle is expected to grow year-on-year, the dividend ratio of some leading enterprises in telecommunication services has increased to provide stable returns and defensive attributes, software and services are expected to recover weakly, and it is expected to see some progress in the implementation of AI applications, and the performance of media and Internet is differentiated, and the performance of movies and games is expected to improve. Among them, AI-related applications, office software, domestic software, telecom operators, and overseas data communication optical module suppliers are expected to exceed expectations.
5) Financial real estate: the performance growth rate of banks is expected to continue to decline due to the drag of interest rate spreads; the performance of securities companies is dragged down by investment banking and institutional business lines or declines year-on-year, and the profit performance of insurance companies is still under pressure due to the impact of a high base on the investment side; the gross profit margin of mainstream real estate enterprises is still in the bottoming stage, the existing land reserves are still under impairment pressure, and the property management performance is relatively resilient.
Combined with analysts' bottom-up estimates, sectors with higher year-on-year earnings growth rates in 1Q24 include automobiles, agriculture, forestry, animal husbandry and fishery, machinery and equipment, electronics, and social services.
Combined with the performance of the first quarter, we pay attention to three main investment lines. The marginal improvement of economic data in the first quarter, the market focuses on the reflection of the economic environment in the fundamentals of listed companies, and grasping the fundamental inflection point and repairing resilience may be important investment ideas. In the first quarterly performance forecast and report disclosure stage, focus on three ideas:
1) Boom areas where the performance of the first quarter may exceed expectations or improve month-on-month, such as the export chain industry.
2) Segments whose performance is gradually rebounding from the bottom of the cycle and have clear industrial trends, such as TMT-related industries such as semiconductors and communication equipment.
3) Industries that take the lead in achieving supply-side clearance in a moderate recovery environment, such as some upstream resources and traditional manufacturing fields, have a relatively high degree of overlap with the dividend sector.
In the original report, we combined with industry analysts to sort out the stocks and segments that are expected to exceed expectations or may be lower than expected in the first quarter from the bottom up for investors' reference.
Chart: CICC analysts' earnings outlook across sectors
Note: Positive outlook scenarios include 1) the first quarter may exceed expectations, 2) the first quarter performance is poor but may be close to the inflection point of improvement, 3) the first quarter results continue the good trend and may be better in the future, the neutral outlook includes the first quarter report may be more in line with expectations, and the negative outlook includes 1) the first quarter report may be lower than expected, 2) the first quarter report may be better but may be close to the weakening inflection point, and 3) the first quarter report negative growth is larger
Source: Wind, CICC Research
Chart: Progress chart of the disclosure of the first quarter of 2023
Source: Wind, CICC Research
Chart: Progress chart of the disclosure of the first quarter of 2024 earnings forecast
Note: As of April 14, 2024
Source: Wind, CICC Research
Chart: The proportion of positive forecasts for the first quarter of 2024 has improved sequentially, but the disclosure rate remains low
Note: As of April 14, 2024
Source: Wind, CICC Research
Chart: Bottom-up aggregated earnings forecasts based on CICC's covered stocks
Note: 1) This statistics is a bottom-up summary of the first-quarter performance forecasts for the A-share companies covered by CICC, and the statistics in the chart contain the earnings forecasts of about 822 companies, and there are certain differences in the number of samples included in different industries, so the results in the chart are incomplete and are for reference only. 2) Software and services 1Q24 year-on-year growth rate of 353.1%
Source: Wind, CICC Research
Chart: Profits of industrial companies increased by 10.2% year-on-year in January-February 2024, continuing to improve from last year
Source: Wind, CICC Research
Chart: The profit growth of industrial enterprises in different industries is clearly differentiated
Note: The growth rate of paper and paper products industry was 337%
Source: Wind, CICC Research
Chart: A list of some companies that have disclosed their forecasts for the first quarter
Note: 1) The data in the table are as of April 14, 2024, and 2) the upper and lower growth limits are year-on-year changes
Source: Wind, CICC Research
Chart: Changes in industry earnings expectations for 2024 since March 2024
Note: 1) as of April 14, 2024 and 2) forecasts are based on the Wind consensus estimate
Source: Wind, CICC Research
Chart: Changes in industry earnings expectations for 2024 since the beginning of 2024
Note: 1) as of April 14, 2024 and 2) forecasts are based on the Wind consensus estimate
Source: Wind, CICC Research
Chart: Forecast net profit change for CSI 300 components
Note: 1) as of April 14, 2024 and 2) Forecast is based on consensus estimates
Source: Chaoyang Perpetual, CICC Research
Chart: Forecast net profit changes for CSI 300 non-financial components
Note: 1) as of April 14, 2024 and 2) Forecast is based on consensus estimates
Source: Chaoyang Perpetual, CICC Research
Chart: A-share earnings and valuation statistics by sector (forecasts based on Wind consensus)
Note: Data as of April 14, 2024
Source: Wind, CICC Research
Article source:
This article is excerpted from: "First Quarter Report Preview: Which Companies Are Expected to Exceed Expectations?", which was released on April 16, 2024.
Li Qiusuo Analyst SAC License No.: S0080513070004 SFC CE Ref: BDO991
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