The Chinese A-share market has recently been buzzing with activity, as over 2,800 companies have released their performance forecasts, shedding light on their business outcomes from the past yearEach announcement feels like a weighty report card, especially in an environment charged with expectationsParticularly, companies that possess a 'technology' gene stand out in this wave of results.

Statistics reveal that more than 600 companies among the 2,800 A-share firms forecast a net profit that will double year-on-year for the fiscal year 2024. A closer look at the various sectors indicates that companies in electronics, instruments and components, chemicals, and machinery are driving much of this optimistic outlook.

Notably, nearly 40% of the predicted profit-growth companies are primarily from the 'Dual Innovation' sectors, particularly those traded on the ChiNext and STAR MarketThis reassuring news reverberated across the secondary market as the first trading week of the Year of the Snake commencedBy February 7, major indices showcased remarkable growth; the Shanghai Composite Index climbed 1.63%, while the Shenzhen Component Index surged by 4.13%. The ChiNext Index emerged as the top performer, soaring 5.36%, and the STAR 50 Index followed closely with a 6.67% riseAmong the stocks traded on the ChiNext, seven saw their prices jump over 30%.

Furthermore, reflecting the excitement surrounding technology stocks, both markets witnessed significant increases in trading volume, with Friday’s afternoon trading alone surpassing ¥1 trillion (approximately $150 billion).

As a market observer, I can't help but feel that these positive developments are like a slowly unfolding blueprint for future growth in tech stocks, underscoring the ongoing vigor of technological innovation

Advertisements

For instance, a particular company within the specialized fine chemicals sector anticipates an astonishing 11,039.13% to 13,064.42% year-on-year increase in net profit for 2024, a figure that is simply staggering.

The rationale behind this growth lies in the company's provision of crucial materials across diverse industries such as solid-state batteries, electronics, coatings, and othersIt has propelled industry progress through innovative technologies and strong research and development, facilitated material substitution and improved the supply chain during industrial upgrades, and contributed significantly to sustainable development through eco-friendly product methods.

Another leading firm in precision electronic components anticipates record-high revenue in 2024, spurred by the continued recovery of the consumer electronics and new energy marketsMeanwhile, companies that focus on consumer electronics, industrial internet, and automotive sectors are also reporting simultaneous growth in both revenue and profit.

However, it’s essential to note that such performance hasn't come without prior and substantial investment in research and developmentMany firms have witnessed improvements in their product lines, brand images, and core competitiveness due to persistent investments despite facing losses in earlier periodsThese gains often surface once the fruits of their R&D efforts start materializing.

Experts suggest that the emphasis on R&D in technology enterprises not only enhances production capabilities but also gives rise to many new products, directly driving revenue increases

Advertisements

As more tech companies transition into a positive cycle fueled by R&D-driven performance, their growth potential will further become apparent.

Witnessing the phenomenal results from these listed companies brings me to a profound realizationIn the volatile landscape of technology investments, one must not underestimate the potential of any firm, regardless of its previous losses or bleak outlooks.Just like a dormant volcano that can suddenly erupt upon achieving breakthroughs in R&D, the prior losses can be overshadowed by swift and remarkable achievements, transforming these companies into industry stars almost overnight.

Take, for example, many internet giants that started as cash-burning companies plagued by losses for successive yearsTheir unwavering commitment to innovation led them to develop groundbreaking software and platforms that not only ushered in profitability but also positioned them prominently in the global tech arena.

Thus, we must not overlook any technology enterprise while investing in this sectorNonetheless, this also highlights the inherent challenges of investing in tech companiesAn incorrect bet can lead to substantial lossesFor average investors, collaborating with reputable fund companies that exclusively manage quality tech sector funds can mitigate risks and allow us to capitalize on the industrial growth.

For those interested in investing in AI through funds, consider the ETF indices such as Hua Xia (589000), AI ETF (515070), Robot ETF (562500), and Chip ETF (159995). Of particular note, the Hua Xia Sci-Tech ETF, one of the first to be launched, reflects the overall performances of the Sci-Tech board market, including dividend returns, offering notable growth potential and an essential tool for those looking to invest in tech firms.

Looking ahead, we have ample reasons to remain optimistic about the continuing growth of the tech market, empowered by sustained innovation and R&D efforts

Advertisements

Advertisements

Advertisements