(Yicai) July 15 -- Listed Chinese firms in six industries, including manufacturers of computer, communication, and electronic equipment, as well as pharmaceuticals, performed above average in the first half whereas photovoltaic and battery companies underachieved, according to the nearly 1,490 earnings forecasts released so far. 

The six winning industries also include chemical products, car parts, as well as special and general equipment. However, makers of PV and battery products recorded sharp declines in profitability, dragged down by falling product prices, according to Wind Information, a financial data provider.

Consumer electronics were booming. For example, Goertek, a supplier of acoustic and optical components, expects to report up to tripled net profit in the first half, it said yesterday. That would be a massive rebound as last year, the firm's net profit dropped 38 percent from 2022.

Moreover, nearly four-fifths of printed circuit board suppliers forecast improved performance, mostly due to new demand coming from the artificial intelligence industry. For instance, Shengyi Electronics, an industry leader, predicts up to an 11-fold surge in net profit. Three other industry giants, Shennan Circuits, Wus Printed Circuit, and Delton Technology, eye more than doubled gains.

Even semiconductor companies benefit from the AI frenzy. Many chip design, packaging, and testing companies said they have raised their capacity utilization rates to respond to added orders amid recovering demand. 

Fifteen of the 31 listed chip companies that have already shared first-half forecasts said that net profit should jump by more than twofold and eight of them predicted higher than fourfold surges.

Makers of memory chips performed well, which indicates a change in the industry cycle. For example, Montage Technology expects up to an eight-fold increase in net profit whereas Biwin Storage Technology is likely to return to profitability.

Another industry that swung back into gains was pig breeding, thanks to the rising prices of live hogs. After more than 20 months of losses, industry leaders Muyuan Foods and Wens Foodstuff Group have both announced restored profitability.

Falling PV and Battery Firms

Not all tech companies were rebounding. 

Following years of strong growth, the PV industry shrunk amid declining product prices. Almost all solar power firms that have made predictions for the first half were unprofitable whereas a year ago, 15 of them were still making money.

For example, Tongwei, a leading supplier of silicon used in solar panels, predicted a net loss between CNY3 billion and CNY3.3 billion (USD413 million and USD454.3 million) in the first half, compared to a net profit of CNY13.3 billion (USD1.8 billion) a year earlier. Longi Green Energy Technology, a maker of wafers and solar modules, expects its net loss to tally between CNY4.8 billion and CNY5.5 billion, much higher than its net profit through last year.

Prices of PV products slumped more than expected, pushing the whole industry into a reshuffle, and the downward adjustment is expected to last at least till March 2025, a source at a private equity fund in Shanghai told Yicai.

The reports showed fragmented performance in the automotive industry. Firms that produce battery materials and finished products suffered huge losses due to falling product prices but those making other automotive components grew.

For example, Tianqi Lithium, a supplier of lithium used in batteries, forecasted a net loss of at least CNY4.9 billion in the first half. Two other large suppliers, Ganfeng Lithium and Chengxin Lithium Group, also predicted losses.

However, other types of car parts were in high demand. The majority, or 34 of the 56 listed auto parts companies that have revealed data, anticipated improvements. Kaizhong Precision Technology expects up to a 15-fold surge in net profit, mainly because the firm started delivering loads of precision connectors for electric vehicle brands. 

Other vehicle parts firms that have predicted major improvements in their performance are Songyuan Automotive Safety Systems, a supplier of seat belts and airbags, Sanhua Intelligent Controls, a maker of thermal management systems for electric vehicles, and Huguang Auto Harness, a producer of wiring harnesses.

As of noon during the last full trading day, a total of 1,487 enterprises listed in Shanghai and Shenzhen had released forecasts of their interim results. About 56 percent of them suggest profits, including 165 companies that are slated to turn losses into profits. But at the same time, 241 firms are prepared to make status updates to record losses, according to Wind.

Editors: Tang Shihua, Emmi Laine