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The Beijing Stock Exchange (BSE) has emerged as a focal point for investors, especially following a recent report indicating that nearly 130 listed companies have already published their earnings forecasts or interim results for the year 2024 by February 23. An upward trend in industry health and a rebound in market demand has played a pivotal role in this optimistic outlookMany of these companies are leveraging technological innovation to upgrade their product offerings and are actively pursuing international markets, which all contribute to a sustained improvement in profitability.
Industry insiders are excited about the structural investment opportunities that the BSE presentsThey are particularly optimistic about the "specialized, refined, distinctive, and innovative" small and medium enterprises that are part of the BSE, emphasizing that these companies are deserving of keen observation due to their unique positioning in the market.
The rebound in demand is a significant catalyst for profit growth among BSE-listed companiesCurrent statistics indicate that as of February 23, 17 companies are projected to achieve a net profit increase of over 100% year-on-yearThe maritime, automotive, and consumer electronics industries are witnessing a remarkable performance boost, with three companies topping the net profit growth charts: China National Offshore Oil Corporation (CNOOC), TIDE, and Tianma Advanced Materials, all operating in these key sectors.
CNOOC anticipates its net profit for 2024 to be between 18 million to 30 million yuan, representing an astonishing growth year-on-year that ranges from 686.2% to 1210.33%. CNOOC credits this success to the deployment of its own vessels into more profitable international trade routes, coupled with substantial efforts to reduce operational costs and fuel expenditures, thus enhancing its gross margins.
TIDE projects a net profit ranging from 22 million to 28 million yuan for the same period, marking a year-on-year increase of 179.11% to 255.24%. The company is expanding both its domestic and international market share aggressively, noting substantial sales growth within its automotive aftermarket segment
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TIDE has also secured multiple strategic partnership agreements, which are expected to bolster its sales figures significantly in the latter half of 2024.
Similarly, Tianma Advanced Materials anticipates a net profit between 38 million to 43 million yuan, reflecting a year-on-year growth of 210.17% to 250.98%. The resurgence in the consumer electronics market, linked to an uptick in shipments of smartphones, PCs, and wearable devices, has facilitated this impressive forecastThe company is intensifying its market outreach, with progressive results leading to a stable upward trend in its operational outcomes.
Moreover, companies like Dezou Automotive, Pingsheng Technology, and Changhong Energy are either realizing or anticipating a turnaround in their profit marginsDezou Automotive's financial brief for 2024 suggests a forecasted net profit of 6.0063 million yuan, a 134.44% increase from the previous yearThe recovery is attributed to a gradual release in consumer demand and the company’s strategic adaptability, which has allowed it to leverage certain policy subsidies effectively, thus improving its overall profit margins.
Companies are increasingly emphasizing the role of technological innovation to stimulate product iterations, which has become a crucial factor in their profit growth trajectoriesFor instance, Haidar anticipates that its net profit attributable to shareholders will range between 81 million and 82 million yuan, up 106.34% to 108.88% year-on-yearThe firm has committed to increasing its research and development investments, leading to the introduction of high-performance sliding rail products that have bolstered its competitive edge.
Similarly, Yuanhang Precision has positioned itself to expect a net profit of between 66 million to 68 million yuan for 2024, which reflects a year-on-year increase of 108.81% to 115.14%. The company has noted a rise in the penetration of electric vehicles (EVs) and a rapid expansion in the energy storage market
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Its strategies to broaden partnerships with key clients and diversify product applications have significantly boosted its sales of nickel strips, foil products, and precision components, aided by stable pricing for key raw materials.
The push into overseas markets is also accelerating profitability among BSE companiesJianbang Technology highlights its dedication to a strategy of "rooted in China, serving globally," along with a multi-pronged marketing approach combining online and offline strategiesThis broad approach is expected to capitalize on the stable development of the global automotive aftermarket, providing significant growth opportunities.
Lin Tai New Materials has similarly intensified its focus on overseas expansions, noting that the recognition and visibility for its products in international markets are on a steady rise, contributing to increased sales from existing overseas clients and attracting new business.
Institutional investors are optimistic about the potential of the BSE marketMany are convinced that the environment is ripe for structural investment opportunitiesCompanies demonstrating steadfast profit growth, particularly those surpassing market expectations, have garnered significant attention from institutional investors.
Ke Yuan Securities notes that liquidity on the BSE has significantly improved compared to previous market cycles, with an anticipated phase of market oscillations in the short termLooking ahead, they express confidence in the allocation value of specific BSE companies, particularly those categorized as "specialized, refined, distinctive, and innovative" SMEs.
Galaxy Securities analyst Fan Xiangxiang identifies three primary areas of focus for 2025: first is the essential new forms of productive forces within the BSE, emphasizing companies with growth potential and positions in trending sectors; secondly, increased policy encouragement for mergers and acquisitions, coupled with significant diversification strategies within BSE entities, necessitates attention toward firms pursuing vertical and horizontal expansions; lastly, consideration for central state-owned enterprises operating with robust management frameworks promoting sustainable growth.
Additionally, analyst Zhao Hao from Huayuan Securities points out that the North Stock 50 Index has been leading market gains since the year began
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