By Patturaja Murugaboopathy and Gaurav Dogra
BENGALURU (Reuters) – The top 200 Chinese companies spanning consumer, technology, industrial, property and financial industries reported September quarter earnings well ahead of market expectations, setting them up for a strong showing next year, analysts said.
These companies mostly beat lowered market expectations as consumer spending remained strong, boosted by Chinese shoppers who opted to buy at home than to travel abroad, as a weaker yuan inflated travel costs.
Profits at Chinese companies grew 10% in the July-September period, beating the 2% growth rate analysts had predicted, and ahead of China’s slowing economic growth rate. Only companies with a market capitalization of over $1 billion (£772.50 million) and tracked by at least three analysts are covered in this analysis.
(Graphic: Asian firms Sep profit growth by Country link: https://fingfx.thomsonreuters.com/gfx/mkt/12/8860/8774/Asian%20firms%20Sep%20profit%20growth%20by%20Country.jpg)
“The sectors that were expected to suffer from the U.S.-China trade conflict — the tech hardware exporters, textiles and sports goods exporters — have largely outperformed consensus expectations,” said Manishi Raychaudhuri, head of equity research at BNP Paribas Asia Pacific.
(Graphic: Asian firms Sep profit growth by sector link: https://fingfx.thomsonreuters.com/gfx/mkt/12/8861/8775/Asian%20firms%20Sep%20profit%20growth%20by%20sector.jpg)
Raychaudhuri added that earnings growth at Asian companies, excluding Japan, is likely to bounce back in 2020, partly as trade concerns recede.
(Graphic: Profit growth for Asian firms link: https://fingfx.thomsonreuters.com/gfx/mkt/12/8862/8776/Pforit%20growth%20for%20Asian%20firms.jpg).
(Reporting By Patturaja Murugaboopathy and Gaurav Dogra in Bengaluru; Edited by Sayantani Ghosh and Shounak Dasgupta)