China Stocks Return 32.5% as Listed Firms Post Just 1% Profit Growth
Updated
Updated · South China Morning Post · May 21
China Stocks Return 32.5% as Listed Firms Post Just 1% Profit Growth
2 articles · Updated · South China Morning Post · May 21
Chinese listed companies delivered 32.5% equity-market returns over the past year, while trailing 12-month net profit growth only turned slightly positive at about 1% by the first quarter of 2026.
A 31.2% rise in price-to-earnings ratios suggests the rally was driven mainly by richer valuations, improved sentiment and optimism around technology rather than stronger corporate earnings.
CKGSB's survey of 2,100 investors found sentiment still firm: 63.8% expect A-shares to rise over the next year and 62.1% see gains in Hong Kong equities.
The survey also pointed to tentative property-market recovery, though it said a broad-based rise in housing prices may still be about 12 months away.
CKGSB warned that for a durable bull market, fundamentals will need to catch up with valuations.
China’s stock market is booming but company profits are not. Is this a historic opportunity or a dangerous trap for investors?
Can Beijing's tech ambitions ignite real growth, or is this another policy-driven bubble waiting to pop?