Overseas expansion and a commodity boom have put Chinese companies trading on the mainland in a position to beat their offshore-listed peers in earnings, cementing the outperformance of yuan-denominated stocks since the outbreak of Middle East hostility.
The 300 largest mainland-traded companies may post average 2025 profit growth of 6.3 per cent during the coming earnings season, while the growth rate for the firms in the Hong Kong exchange’s benchmark Hang Seng Index would be a mere 2 per cent, according to Bloomberg data. The earnings season runs through the end of April.
“Earnings for mainland-listed companies are showing signs of trending up, and those companies are really doing a good job in business transformations by going overseas,” said Dai Ming, a fund manager at Huichen Asset Management in Shanghai. “What we’ve seen in the Hong Kong market is different as competition is intensified and margins are eroded by pretty weak consumption in China. The bifurcation of the two markets will continue.”
Yuan-denominated stocks trading on China’s onshore exchanges also skew heavily to traditional sectors like energy and industrials, which have gained as commodity prices spiked over the past year amid geopolitical tensions and rising energy demand tied to artificial intelligence. In Hong Kong, where Chinese tech companies dominate, bellwethers Alibaba Group Holding, JD.com and Meituan have been mired in a costly price war in the fast delivery market.
The divergence in earnings performance could cement the edge mainland-listed stocks have over those in Hong Kong, where sentiment remains fragile after the eruption of the US-Iran war due to greater exposure to global capital flows. The Hang Seng gauge has dropped nearly 3 per cent this month, while the CSI 300 is virtually unchanged.
Companies in non-ferrous metals, chemicals and power equipment benefited the most from increased product prices and improved utilisation, according to Huatai Securities. Meanwhile, nearly 60 per cent of the mainland-listed companies that registered sales increases flagged contributions from overseas markets, it said.
Contemporary Amperex Technology Ltd, known as CATL, is one of the beneficiaries. As it reported a 42 per cent increase in net income for 2025, the world’s biggest maker of lithium-ion batteries for electric vehicles said this week in its annual results that overseas sales accounted for 30 per cent of its total sales, double the proportion in 2020.
