On February 12, the Financial Associated Press reported (edited by Hu Jiarong) that the annual report performance period for overseas Chinese stocks (433 Chinese companies listed in Hong Kong and the USA) in 2024 is about to begin.

According to Bloomberg's forecast, the first batch of annual reports will be released in mid to late February, with the peak occurring in late March. It is expected that listed companies with a market cap share of approximately 46% will announce their performance in the week of March 17.

From the progress of sector disclosures, companies in sectors such as Information Technology and Industry will be the first to release their annual reports in mid-February, while most companies in sectors like Communications Services and Consumer Discretionary will begin disclosures in late February, and those in the Financial Sector will focus on late March.

In terms of individual stocks,$Baidu (BIDU.US)$、 $Trip.com (TCOM.US)$ The company will disclose its annual report in mid to late February.$Li Auto (LI.US)$、$NetEase (NTES.US)$Companies like JD.com will disclose their reports from late February to early March.$KE Holdings (BEKE.US)$、$WUXI APPTEC (02359.HK)$、$TENCENT (00700.HK)$Many companies will announce their performance in mid to late March.

2024 Profit Outlook: Low at the beginning and high at the end, with strong performance in Insurance and Autos.

Overall, the earnings of overseas Chinese stocks are expected to grow by 13.2% in 2024, significantly higher than the year-on-year growth rate of 6.6% in the first half.

In terms of RMB, the predictions made by China International Capital Corporation analysts show that the earnings growth of Hong Kong stocks and Chinese concept stocks presents a low-to-high trend in 2024, with an annual growth of 13.2%, implying a nearly 20% year-on-year growth in the second half. Among these, the Insurance, Autos, and household appliances sectors stand out particularly due to policy catalysis.

Although the overall profit growth outlook is optimistic, there are significant differences in performance across sectors.

In the financial sector, Banks' interest margins continue to narrow, with zero growth expected in earnings for 2024, while the Insurance sector's performance has improved significantly due to the recovery of the Capital Markets.

Profits in the upstream Energy and Raw Materials Sectors are expected to grow by 17% and 21% respectively, with the Metal and Mining Industry benefiting from high gold prices, projected to increase profits by 43%.

In the Defensive Sector, profits in Medical Care and Utilities are expected to grow by 8% and 13% respectively, showing improvement compared to the first half of the year.

The downstream Consumer Sector is experiencing slower growth, but there is significant internal differentiation. Profits in the Discretionary Consumer Sector are expected to grow by 43%, while the Necessary Consumer Sector is projected to grow by 12%. The Autos Sector, supported by trade-in policies, shows significant improvement in domestic demand, with leading companies that have high export ratios maintaining substantial profit growth.

Specifically, the Insurance Sector benefits from a recovery in Capital Markets, with profits expected to grow by 54% in 2024, far exceeding the 3% growth in the first half of the year. The Autos Sector will see noticeable improvement in domestic demand due to trade-in policies, with overall profit growth expected to rise to 192%, a significant increase from the 134% seen in the first half. The Home Appliances Sector also benefits from policy support, with profits expected to grow by 20% year-on-year.

Additionally, the Marine Transportation Sector related to the export chain shows significant improvement, with profits expected to grow by 103% year-on-year in 2024, while the Industrial Sector's profits are expected to grow by 26%, mainly benefiting from improvements in container shipping and port companies due to enhanced exports.

China International Capital Corporation predicts: profit growth exceeds market consensus, with a cautiously optimistic outlook for future growth.

Analysts from China International Capital Corporation predict the profit growth rate for overseas Chinese companies in 2024 will be 13.2%, higher than the market consensus of 11.3%. Among them, forecasts for sectors such as Insurance, Transportation Infrastructure, Technology Hardware, and Semiconductors are relatively optimistic, while profit expectations for sectors like Autos and Building Materials are below market consensus.

Looking ahead to 2025, China International Capital Corporation expects the profit growth of overseas Chinese companies to be between 2-3%, lower than the market consensus of 6%. Although external demand supports GDP growth, external tariff uncertainties may weaken the growth momentum for 2025. However, Hong Kong-listed companies still have certain advantages in industry structure and concentration, with a high proportion of XINJINGJI, and the contribution effect of leading companies is significant.

Investment opportunities in sectors: Structural opportunities in Technology and AI are becoming prominent.

China International Capital Corporation pointed out that the growth rates of sectors such as Semiconductors, Biotechnology, and Household and Personal Products are expected to improve significantly compared to 2024. Sectors like Autos, Technology Hardware, Consumer Services, Home Appliances and Textile Services, Media Entertainment, and E-commerce Retail are still expected to maintain a profit growth of over 10%, with resilient performance.

Based on ROE and PE measurements, the cost-effectiveness of sectors such as Autos, Software Services, E-commerce Internet, and Technology Hardware is more attractive. The expected ROE for these sectors in 2025 is higher than the average of the past three years, while the P/E levels are lower than the average of the past three years, indicating strong profitability relative to valuation, expected to be highlights in a moderately growing performance overall.

Domestic AI startup released DeepSeek-R1, which may drive demand in related industries such as Computing Power, Chips, Data Services, and Communications. Investors are advised to focus on structural investment opportunities in Technology and AI fields.

Overall, the performance of overseas Chinese stocks in 2024 is expected to show a trend of low first and high later, with sectors such as Insurance and Appliances performing prominently under policy catalysis, while the Technology and AI sectors are expected to become investment highlights in the future.

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