Core Insights - Chinese listed companies experienced their fastest profit growth of the year in Q3, driven by government initiatives to reduce excess industrial output and increased demand for semiconductors due to tech self-reliance [1][2] Earnings Growth - Earnings of mainland China-listed companies rose by 11.6% year-on-year in Q3, a significant increase compared to 1.2% in Q2 and 3.2% in Q1 [2] - Technology companies were the primary contributors to this surge, with commodity producers and financial firms also showing notable improvements in earnings [2] Market Impact - The positive quarterly results are expected to support the ongoing rally in Chinese stocks, which has been fueled by a shift from bank savings to risk assets and expectations of increased government efforts to combat deflation [3] - A recovery in earnings growth is deemed critical for sustaining the stock market rally, especially as valuations have risen amid increased investor risk appetite [3] Future Outlook - Analysts predict continued support for corporate earnings from tech self-reliance, initiatives to reduce excess output, and easing tensions between China and the US [5] - The technology, media, and telecom (TMT) sectors, along with resource sectors, are expected to maintain strong earnings growth, while the non-financial sector may benefit from a low base in Q4 [5] Sector Performance - Tech companies showed remarkable performance, with profits on the tech-heavy Star Market increasing by 63.4% year-on-year, and those on the ChiNext board growing by 34.9% [6] - Companies on the main boards of the Shanghai and Shenzhen exchanges reported a profit growth of 10.4% [6] Notable Company Performance - Cambricon Technologies, an AI chipmaker, reported a 14-fold increase in revenue and turned a profit in Q3, leading to a more than doubling of its stock price this year on the Star Market [7]

In a sign of how critical technology will be for China's growth in the following five years, the proposal had 46 references to the word, compared with 36 in the plan for 2020-2025.Chipmakers, robotics companies, high-end manufacturers and stocks linked to domestic consumption were set to emerge as outperformers in the long run, according to brokerages including Guotai Haitong Securities and Huajin Securities.Chinese President Xi Jinping (centre) attends the fourth plenary session of the 20th Communist Party ...