In response to economic changes at home and abroad in the first three quarters, SZSE-listed companies adhered to high-quality and new development concepts and enjoyed growth in both operating income and net profit. As at 31 October 2019, all of 2,187 SZSE-listed companies (except for CS) had disclosed their reports for the third quarter, of which 1,906 (nearly 90%) achieved profits and 476 registered more than 50% growth in net profit. In the first three quarters, the operating income and net profit of SZSE-listed companies totaled RMB9.3 trillion and RMB643.329 billion respectively, with a year-on-year (YoY) increase of 7.82% and 2.79%. Net profit saw a quarter-on-quarter (QoQ) growth of 10.90%, indicating an upward momentum.

Companies listed on Main Board and SME Board embraced steady development thanks to stable foundation and great resilience

On the whole, the companies listed on Main Board and SME Board were stable and improved in terms of quality. Their capacities of dealing with risks were improved. Meanwhile, sector resilience was enhanced slightly. Data shows that, the companies listed on Main Board of SZSE recorded an average operating income of RMB9.854 billion, a YoY increase of 7.75%. Their average net profit rose by 3.30% YoY to RMB647 million. The companies listed on SME Board recorded an average operating income of RMB3.839 billion, a YoY increase of 7.27%. Their average net profit rose by 4.45% YoY to RMB272 million. Leading enterprises (such as PAB, Midea Group (000333 and Vanke-A continued to develop at a high speed. In the first three quarters, they realized profit of RMB23.621 billion, RMB21.316 billion and RMB18.241 billion respectively, representing a growth of 15.47%, 19.08% and 30.34%.

By industries, banking (RMB5.707 billion), steel & iron (RMB1.423 billion) and household electrical appliance (RMB1.264 billion) on Main Board and SME Board ranked top three by average net profit in the first three quarters. The profit growth of agriculture, forestry, animal husbandry and fishery, national defense & military, and non-banking finance ranked top, with YoY surges of 121.66%, 80.03% and 41.85% respectively.

The profit growth of companies listed on ChiNext Board recovered with high quality and huge potential

The profit growth of companies listed on ChiNext Board recovered. The momentum of sector development remained strong. In the first three quarters, the companies (excluding LeTV listed on ChiNext Board registered an average operating income and net profit of RMB1.381 billion and RMB122 million, with a YoY (QoQ) increase of 10.01% and 6.30% (12.86% and 25.70%), respectively. Technology-based enterprises represented by Mindray, CATL and Aier Eye Hospital (300015) developed rapidly. They actively employed technical innovation to expand development, producing remarkable results. ChiNext Board has become an important force to support innovation, entrepreneurship and economic transformation, and made positive contributions to improving and innovating the capital formation mechanism, implementing the innovation-driven development strategy and serving high-quality economic development.

By industries, medical biotechnology on ChiNext Board witnessed an average net profit of RMB237 million in the first three quarters. Electronics, electrical equipment, communication and chemical industries had average net profit exceeding RMB100 million. The net profit of electrical equipment industry rose by 30.94%. The net profit of communication and medical biotechnology industries grew at a rate of more than 20%. In Q3, electronics, computer and electrical equipment industries skyrocketed by 97.85%, 85.96% and 72.58% respectively in net profit. The figure exceeded 40% in the industries of medical biotechnology, building decoration and public utilities.

Strove to improve the quality of listed companies through increasing internal strength and strengthening main business

Since the beginning of this year, SZSE-listed companies have been committed to main business, and steady and standard operation. Average net cash flows from operating activities at the end of the period reached RMB379 million, a YoY increase of 328.98%. Liquidity improved significantly. Asset-liability ratio averaged 67.11%, a YoY decrease of 0.56 percentage point. Positive factors (such as better asset structure and operation quality) are continuously gathering in listed companies. On the other hand, affected by industry cycle and changes in external factors, some industries (such as media, automobile and light industry manufacturing) were under pressure. Continuous attention should be paid to high-proportion pledge risks in controlling shareholders of a few companies. Some companies still faced problems, e.g., main business was sluggish throughout the year and operation was substandard. They should be rationally analyzed and solved dialectically. SZSE will pay continuous attention to them and promote solutions thereof in subsequent reform deepening.

As the quality of listed companies is the cornerstone of sustainable development of the capital market, improving their quality is an important goal of supervision thereof. Centering on the fundamental task of serving the high-quality development of real economy and based on the work requirements of "Four Awes" and "One Resultant Force", SZSE will step up supervision of and service for listed companies in aspects of capital formation, resources allocation and risk mitigation, continuously refine basic rules and urge market players to earnestly perform their responsibilities, purify market environment and create a good ecosphere, so as to lay a solid foundation for establishing a standard, transparent, open, vibrant and resilient capital market.