Wang Yang, an analyst with Soochow Securities based in Suzhou, Jia
ngsu province, said that apart from the economic recovery underpinned by su
pportive policies, cyclical factors also imply that earnings growth will continue to recover in the rest of the year.
According to Wang, the current profit cycle of A-share companies started from 2
016 and should end with recovery this year, as the cycles usually last for 12 to 14 quarters.
This year’s gradual recovery in earnings growth could help the A-share market to withstan
d external uncertainties, said Yan Xiang, an analyst with Shenzhen-based Guosen Securities.
“It is quite different from 2018 when earnings growth of most companies deteriorated. Earn
ings growth, a determinant of the market trend, is likely to be on the recovery path,” Yan said in a note.