Chinese corporate earnings gathered momentum in the first three quarters, with electronics and non-ferrous metals companies posting some of the strongest results so far, according to Timothy Pope, a market analyst for China Global Television Network (CGTN).
Among the standout performers, Pope pointed to Chinese AI chipmaker Cambricon, which he described as one of the market darlings after reporting revenue of more than 9.5 billion yuan for the first nine months of the year, more than double the same period last year, with net profit up slightly more than 130 percent. Semiconductor packaging and testing company JCET also posted strong earnings, with net profit up almost 70 percent despite revenue growing by just 8 percent.
Despite the strong year-on-year results from leading earners, Pope cautioned that more than half of the A-share companies that had reported so far recorded quarter-on-quarter profit declines. The analyst also noted that the reporting season is still incomplete, making it too early to call a broad market acceleration.
"But there is a bit of a note of caution now. We saw the roughly 850 A-share companies that had reported by Sunday, more than half of those have comparable figures recorded lower profits in the third quarter than they did in the second. So while year-on-year growth figures are pretty encouraging, quarterly earnings momentum is showing some signs of slowing. And we also need to remember that we've only heard from around 850 of the more than 5,000 listed A-share companies so far. The bulk of the reporting is still to come this week, so it's too early to draw definitive conclusions about the wider market," he said.
A-share earnings show momentum in first three quarters: analyst
Global buyers are converging on the ongoing 140th China Import and Export Fair in Guangzhou, south China's Guangdong Province, where competing suppliers gathered under one roof allow them to compare products, quality and prices side by side, with many extending their trips beyond the exhibition halls to the factory floors that ring the city.
Also known as the Canton Fair, the biannual event is China's largest and longest-running comprehensive trade fair and a widely watched barometer of the country's foreign trade.
For the buyers streaming through the bustling halls, the fair's value lies in that concentration, the ability to move between countless suppliers in a single space and weigh offers directly against one another.
"The beauty about Canton Fair is all these different suppliers are all together. So you can go from one supplier to another, to another. Compare their products, quality as well as price, and you put them all together and then you make a decision. Makes it absolutely fantastic. We would like to come again and again and again. Once you come to China once, you will come many times. Next year, we will be here again," said Humphrey Muturi, a buyer from Kenya.
The sourcing journey often continues well beyond the exhibition venue, as Guangzhou sits in the Pearl River Delta, one of China's manufacturing heartlands, where many factories lie just an hour's drive from the fairgrounds.
Buyers frequently take the opportunity to visit production sites in person, where they can observe assembly lines in operation and see the manufacturing process up close.
"Once you go to one company, you get to learn all the manufactured items, you go to the next, you can compare how they operate. You can come to [understand and learn critical information], you can ask them questions and interact, and give them the specification that you are looking for. And they help very fast," said Titus Muthomi, another buyer from Kenya.
That direct access is backed by China's complete industrial chain and stable manufacturing capability, which enable suppliers to offer full-package solutions and customized services to overseas buyers, rather than one-off sales.
Canton Fair puts China's entire supply chain within global buyers' reach
