A-Share Mid-Year Report: Steady Leading Performance, Dividends Rise

From an industry perspective, the photovoltaic and real estate sectors are underperforming, while the electronics and automotive industries are experiencing a recovery in prosperity.

The agriculture, forestry, animal husbandry, and fishery sectors are accelerating their turnaround to profitability as the "mid-term exam" results for A-share listed companies are released.

Wind (Wangde) data shows that 5,348 listed companies published their semi-annual reports for 2024, with a combined operating income of approximately 34.87 trillion yuan, a year-on-year decrease of 1.41%; they achieved a net profit attributable to shareholders of 2.9 trillion yuan, a year-on-year decrease of 2.37%.

Among them, 56 companies had operating incomes exceeding 100 billion yuan, and 46 companies had net profits to shareholders exceeding 10 billion yuan, with nearly 80% of the companies being profitable.

Thirty-one companies had net losses exceeding 10 billion yuan, with Vanke A, Longi Green Energy, and Tianqi Lithium ranking at the top, with net losses of 9.852 billion yuan, 5.243 billion yuan, and 5.206 billion yuan, respectively.

In terms of performance growth, 57% of A-share companies achieved year-on-year growth in operating income in the first half of the year, and 49% of companies achieved year-on-year growth in net profit attributable to shareholders.

1,013 companies saw their net profits increase by more than 50%, and 617 companies doubled their net profits year-on-year.

From an industry perspective, the electronics and automotive sectors have significantly improved in terms of prosperity, and the agriculture, forestry, animal husbandry, and fishery sectors have seen a substantial increase in net profits, with some companies accelerating their turnaround.

However, companies with larger losses are mainly concentrated in the real estate and new energy industries.

Among the 31 first-level industries of Shenwan, the net profit growth rates of agriculture, forestry, animal husbandry, and fishery, social services, electronics, automotive, and public utilities are ranked in the top five, with increases of 184%, 86%, 37%, 22%, and 17%, respectively.

The net profit declines in real estate, building materials, power equipment, steel, and computers are ranked in the top five, all exceeding 40%, with the real estate industry's decline being 138%.

It is worth mentioning that the number of listed companies that introduced mid-term dividends this year has increased significantly.

Wind data shows that as of August 31, a total of 672 A-share listed companies in the Shanghai, Shenzhen, and Beijing markets published their mid-term cash dividend plans or plans for 2024, accounting for approximately 12.58% of all A-share listed companies.

The combined mid-term dividend amount reached 528.8 billion yuan, both of which have significantly set new historical records.

"Three oil giants" have revenues exceeding one trillion yuan, and the industry leaders' performance is stable.

In the revenue ranking for the first half of 2024, Sinopec, PetroChina, and China State Construction Engineering Corporation rank in the top three, with revenues all exceeding one trillion yuan.

Excluding petrochemical and financial enterprises, China State Construction Engineering Corporation leads with a revenue of 1.14 trillion yuan, followed by China Mobile, China Railway Group Limited, and China Railway Construction Corporation, with revenues all breaking through 500 billion yuan.

In addition, there are a total of 56 companies with revenues exceeding 100 billion yuan, 109 companies with revenues exceeding 50 billion yuan, and 478 companies with revenues exceeding 10 billion yuan.

In terms of growth, among the companies with revenues exceeding 10 billion yuan, seven companies have doubled their revenues year-on-year, with Sailis, Wanchen Group, and Xinhu Zhongbao ranking in the top three, with revenue growth rates of 490%, 392%, and 345%, respectively.

In terms of profitability, most of the top ten are still from the financial industry.

ICBC ranks first in the net profit of A-shares in the first half of 2024 with 170.467 billion yuan, followed by CCB, ABC, and BOC, with net profits attributable to shareholders all exceeding 10 billion yuan.

Excluding the financial industry and the "three oil giants," China Mobile, Kweichow Moutai, China Shenhua, China State Construction Engineering Corporation, CATL, China Telecom, Midea Group, Wuliangye, COSCO Shipping, and Zijin Mining are the top ten "profit kings" among A-share listed companies.

Many industry leader companies have performed stably.

The liquor industry leader Kweichow Moutai's revenue reached 80 billion yuan in the first half of the year, and its net profit also exceeded 40 billion yuan, with year-on-year growth rates of 17.56% and 15.88%, respectively.

The company also announced a cash dividend plan for 2024-2026, which means that the total amount of cash dividends distributed annually is not less than 75% of the net profit attributable to the shareholders of the listed company for the year.

The power battery leader CATL's net profit attributable to shareholders in the first half of the year increased by 10.37% to 22.865 billion yuan, and its operating income decreased by 11.88% to 166.767 billion yuan.

CATL stated that from January to May 2024, the company's power battery usage accounted for 37.5% of the global market, an increase of 2.3 percentage points year-on-year, ranking first in the world.

The mining leader Zijin Mining achieved a revenue of 150.417 billion yuan in the first half of the year, a year-on-year increase of 0.06%, and a net profit attributable to shareholders of 15.084 billion yuan, a year-on-year increase of 46.42%.

Zijin Mining stated that the upward trend of costs has been curbed, and the company's sales costs of copper concentrate and gold concentrate have decreased by 8.8% and 6.7% quarter-on-quarter, respectively.

Looking at the net profit growth of individual stocks, among the companies with net profits exceeding 10 billion yuan, 21 companies have doubled their net profits year-on-year, with Bailitengheng, Tongkun Shares, and Will Semiconductor ranking in the top three, with net profit growth rates of 1521%, 911%, and 793%, respectively.

The agriculture, forestry, animal husbandry, and fishery sectors are recovering, while real estate and photovoltaics are cooling down.

In terms of industry, in the first half of this year, there are 14 industries with revenues exceeding one trillion yuan, among which the construction and decoration industry has the highest revenue, reaching 4.23 trillion yuan, followed by petrochemicals, banking, transportation, and the automotive industry.

In terms of revenue growth, the electronics industry ranks first in the Shenwan first-level industry with a 16% increase, followed by social services, automotive, computers, and home appliances.

In terms of the growth rate of net profits in the industry, agriculture, forestry, animal husbandry, and fishery rank first in the Shenwan first-level industry with an increase of 184%.

In terms of secondary sub-industries, the growth rates of feed, fisheries, and breeding all exceed 100%.

The majority of listed pig companies have narrowed their losses or turned losses into profits.

Industry leaders Muyuan Foods and Wens Foodstuffs have both seen net profit growth exceeding 100% year-on-year.

Most pig companies attribute the recovery in performance to the strengthening of pig prices and the decline in feed costs.

The electronics industry has also ushered in a cyclical recovery.

Industry analysis believes that the rapid development of emerging technologies such as AI has created new demand for electronic devices such as chips.

Foxconn, Luxshare Precision, Transsion Holdings, Northern Huadu, and BOE Technology, five listed companies in the electronics industry, have all achieved net profits attributable to shareholders exceeding 2 billion yuan, with growth rates all above 20%.

Taking the panel giant BOE Technology as an example, its net profit attributable to shareholders in the first half of 2024 increased by 210% to 2.284 billion yuan.

The company stated that the main reason is the rise in the prosperity of the semiconductor display industry and the continuous optimization of the industry structure.

The semiconductor leader Will Semiconductor achieved a net profit attributable to shareholders of 1.367 billion yuan in the first half of the year, a year-on-year increase of 793%.

It stated that as the consumer market continues to warm up, downstream customer demand has increased, and the company's product penetration in the high-end smartphone market and the continuous penetration of autonomous driving applications in the automotive market.

On the other hand, overall, companies with larger losses are mainly concentrated in the real estate, photovoltaic, and lithium mining industries.

Due to factors such as declining housing prices and asset impairment, the performance of listed real estate companies in the first half of 2024 is relatively low.

More than 40% of listed real estate companies in the first half of this year are losing money, and more than 60% of real estate companies' net profits attributable to shareholders have fallen to the level of ten years ago (excluding companies listed after 2014).

The real estate companies that have recorded losses include not only industry leaders like Vanke but also some state-owned and central enterprises.

The photovoltaic industry is also facing cyclical adjustments in the industry.

Under the mismatch of supply and demand, many links are experiencing a decline in both volume and price.

Longi Green Energy, Tongwei Shares, and TCL Zhonghuan all had net losses exceeding 3 billion yuan in the first half of the year, with year-on-year declines all exceeding 100%.

Longi Green Energy attributed the decline in performance in its financial statements to the "continuous and significant decline in the industry chain prices" and the "impact of inventory impairment provisions."

Tongwei Shares also stated that due to the comprehensive and significant decline in market prices at all levels of the industry chain and the continued downturn, the photovoltaic business operations incurred losses in the first half of the year.

Mid-term dividends have become a new trend in this year's semi-annual reports of A-share listed companies.

A major feature of the semi-annual reports of A-share listed companies this year is the significant increase in the number of companies that have introduced mid-term dividends.

Wind data shows that as of August 31, a total of 672 A-share listed companies in the Shanghai, Shenzhen, and Beijing markets published their mid-term cash dividend plans or plans for 2024, accounting for approximately 12.58% of all A-share listed companies.

The combined mid-term dividend amount reached 528.8 billion yuan, both of which have significantly set new historical records.

Compared with the trend in previous years, the enthusiasm of A-share listed companies to introduce mid-term dividends this year has been significantly increased.

In terms of the number of dividend-paying listed companies, the number of mid-term dividend-paying listed companies has exceeded the total of the previous three years, with the number of A-share listed companies implementing mid-term dividends in 2021, 2022, and 2023 being 186, 138, and 194, respectively.

The mid-term dividend amount has also significantly surpassed previous years, with the mid-term dividend amount of A-shares being 104.3 billion yuan, 229.3 billion yuan, and 205.2 billion yuan in 2021, 2022, and 2023, respectively.

In April this year, the State Council issued the new "Nine Articles of the State," which clearly pointed out the need to enhance the stability, continuity, and predictability of dividends, and to promote multiple dividends, pre-dividends, and dividends before the Spring Festival.

At the same time, it also proposed to include companies that have not paid dividends for many years or have a low dividend ratio into "implementation of other risk warnings" (ST).

Under the guidance of regulatory policies encouraging dividends, many A-share listed companies have introduced mid-term dividend plans for the first time or after many years this year.

The China Listed Companies Association released a report stating that this year, more than 480 listed companies have paid dividends for the first time in the first half of the year (quarter) in the past five years.

Among the five major state-owned banks, ICBC, ABC, and BOC have all paid mid-term dividends for the first time since listing, while CCB and BOCOM have paid mid-term dividends for the first time after many years.

The total mid-term dividend amount of the five major state-owned banks reached 190.177 billion yuan, accounting for approximately 35.96% of the total mid-term dividend amount of A-shares.

In terms of the absolute dividend amount, the main force of this year's mid-term dividends is still the "China" companies, among which banks, energy, and telecommunications industries have the largest proportion of dividend amounts, with mid-term dividend amounts of 214.412 billion yuan, 93.426 billion yuan, and 71.243 billion yuan, respectively.Additionally, this year, several privately-owned listed companies have historically introduced mid-term dividend plans.

Mindray Medical, a leader in private medical devices, plans to distribute a dividend of 40.6 yuan (including tax) per 10 shares to all shareholders, with a total proposed cash dividend of approximately 4.923 billion yuan, accounting for 65.11% of the semi-annual net profit attributable to the parent company.

Yifeng Pharmacy, a leader in private chain pharmacies, plans to distribute a dividend of 2.5 yuan (including tax) per 10 shares, with a total cash dividend of 303.1 million yuan, accounting for 38% of the semi-annual net profit attributable to the parent company.

"From the perspective of liquidity of investment returns, even if the annual dividend amount remains unchanged, a higher frequency of dividend returns will bring higher liquidity value and more certain cash flows," said Changjiang Securities.

In addition to dividends, buybacks, which play the same role in increasing investor returns, have also far exceeded the levels of previous years.

Wind data shows that, as of the end of August, 1888 listed companies on the A-share market have implemented buybacks, a year-on-year increase of 105.89%, with a total buyback amount of 129.377 billion yuan, a year-on-year increase of 175.99%.

In fact, from the perspective of investors, investors in the secondary market have increasingly favored high-dividend, high-yield dividend stocks in the past two years.

As of September 2nd, the CSI Dividend Index has accumulated a gain of more than 5% this year, with a cumulative gain of nearly 11% in the past two years, significantly outperforming the broad market index.

An investor in the secondary market said, "Listed companies increasing shareholder returns through dividends and buybacks is the normal logic that drives the market up.

Against the current low-risk interest rate background, if listed companies can sustain dividends of 5%-6% or even higher, this will be very attractive for a continuous inflow of funds."