AI TRENDS | Huatai Securities: Earnings Season Focuses on AI, Price Increases, and Manufacturing

Huatai Securities said investors should focus on three themes during earnings season: AI, price increases, and manufacturing.

According to Jin10, Huatai Securities said that as the period of intensive earnings pre-announcement disclosures approaches, it reviewed multiple indicators.

First, it said the disclosure rate for interim earnings pre-announcements remained relatively low. The industries with relatively high disclosure rates and relatively high proportions of positive pre-announcements included petrochemicals, non-bank financials, nonferrous metals, chemicals, and electronics. It added that the industries with leading median net profit growth rates in pre-announcements included agriculture, petrochemicals, defense, computers, and media, and noted these rankings could still change as the disclosure rate rises.

Second, based on changes in profit expectations over the past month, Huatai Securities said the industries with the largest upward revisions included coal, building materials, electronics, communications, and chemicals. It added that the industries with the broadest upward revisions included building materials, coal, nonferrous metals, communications, and machinery.

Third, it said midstream data showed that clues of improving business conditions were concentrated in the AI supply chain, the price-increase supply chain, and manufacturing going overseas. It listed the AI supply chain as including components, semiconductors, optical communications, optoelectronics, and gaming. It listed the price-increase supply chain as including shipping, fiberglass, coal, papermaking, some chemical products, and copper. It listed overseas manufacturing as including marine equipment, general automation, batteries, and construction machinery.