JPMorgan recently released a report stating that the current market expectations for the growth of Chinese corporate earnings in the fourth quarter of 2025 are relatively low, with significant upward revision potential in the future.
According to the Wind Trading Desk, the report points out that the earnings report disclosures are still in the early stages. As of February 10, only 3% of the market capitalization of the MSCI China Index and 10% of the market capitalization of the CSI 300 Index have released their Q4 2025 results. Based on the performance in the first three quarters, the MSCI China EPS grew by 8% year-on-year, which implies an implied growth rate of -8% for the fourth quarter, while the consensus expectation for the entire year is +2%, indicating that as long as the actual performance in the fourth quarter exceeds this low baseline, there is ample room for positive surprises. For the CSI 300, the EPS grew by 11% year-on-year in the third quarter, driving a cumulative growth rate of 9% for the first three quarters, laying a solid foundation for the annual performance.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/f3b2a1d1-f3df-476f-8c00-ca187d47a71f.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/f3b2a1d1-f3df-476f-8c00-ca187d47a71f.png"/>
By industry, the current downward pressure on earnings expectations is highly concentrated in the financial sector. The MSCI China financial sector saw a year-on-year growth rate of 39% in the third quarter, while the consensus expectation for the fourth quarter is only -18%, a sequential decline of as much as 58 percentage points. The report believes that this implied assumption may be overly pessimistic, and the financial sector is likely to perform better than current expectations. In contrast, the real estate, utilities, and healthcare sectors need to achieve the largest sequential growth leaps to meet the annual consensus targets, thus also possessing room for positive surprises.
JPMorgan stated that as more companies disclose their earnings, the market consensus is expected to be revised upward.
<h2>Industry Differentiation: Disclosed Companies Show Structural Highlights</h2>
As of February 9, a total of 3,059 companies in the A-share market have released their earnings forecasts for 2025. The positive forecast ratio is about 36%, with 625 companies expecting an increase, 96 expecting slight increases or continued profitability, and 375 turning losses into profits.
Positive forecasts are concentrated in signaling economic recovery. The five industries with the highest proportion of positive forecasts are: capital markets (84%), benefiting from the rebound in brokerage investment banking and proprietary trading profits; industrial groups (71%), driven by rising commodity prices, cost optimization, and narrowing impairment losses; electric utilities (67%), boosted by falling coal prices and the expansion of renewable energy capacity improving gross margins; aviation (60%), supported by a recovery in travel demand; and automotive parts (57%), with sales growth driven by new energy subsidies and product innovation.
Negative forecasts are highly concentrated in industries experiencing economic downturns. The oil and gas and consumer fuels sectors have a positive forecast rate of only 17%, primarily due to the downward shift in energy prices in 2025; real estate (17%) is constrained by reduced sales and ongoing asset impairments; air freight logistics (17%) faces dual pressures from declining demand and intensified competition; beverages (16%) are experiencing weak high-end demand; and diversified retail (16%) is dragged down by losses in commercial real estate investments and declining rental income.
Early signals of the earnings season are emerging, with leading companies in multiple industries delivering better-than-expected results. The banking sector is experiencing a strong recovery. China Merchants Bank, Nanjing Bank, Industrial Bank, Citic Bank, and Shanghai Pudong Development Bank all exceeded expectations, with net interest income recovery becoming the core growth engine.
K-12 education has surged significantly. New Oriental and TAL Education both exceeded expectations, with TAL's non-GAAP operating profit reaching $104 million, approximately four times the market consensus expectation.
JP Morgan pointed out that the current earnings season is still in the early disclosure stage. As more companies report their performance, the market's understanding of industry prosperity differentiation and leading capabilities is expected to deepen further

159887

510300

MCHI

JP Morgan's recent report pointed out that the current market expectations for the earnings growth of Chinese enterprises in the fourth quarter of 2025 are relatively low, with significant upside revision potential. The financial sector is overly pessimistically priced, and the assumed quarter-on-quarter decline of 58% may be difficult to realize. Among the disclosed performances, the positive forecast rate for sectors such as capital markets, industry, and electricity exceeds 60%, indicating structural prosperity signals

Wallstreetcn

Fullgoal CSI 800 Banks ETF

Huatai-PB CSI 300 ETF

iShares MSCI China

Tianshun

HSCEI ETF

Hwabao WP CSI All Share Investment Banking & Brokerage ETF

Defiance Daily Target 2X Long JPM ETF

E Fund CSI 300 ETF Initiating Fund

JPMorgan Chase

China Southern Hang Seng ETF

CSI 300

ChinaAMC CSI Banks ETF

Hang Seng China Enterprises Index

Hang Seng Index

Hwabao WP CSI Banks ETF

ChinaAMC Hang Seng ETF

Huaan CSI Banks ETF

GF Fund CSI HK Connect Financials(ex Banks) Thematic ETF

WP CSI Banks ETF

TRACKER FUND

Guotai CSI All Share Investment Banking & Brokerage ETF

Yinhua CSI All Share Investment Banking & Brokerage ETF

Earnings season brings surprises! JP Morgan: The market's earnings expectations for Chinese companies are too low!