Huge losses in the annual report reveal a widening divergence in Q1 earnings.

XinKuai News: Reporter Tu Bo reports that the 2025 annual reports are gradually being disclosed, and the first-quarter report market outlook is also underway. Everything is showing a pattern of extremes—ice on one side and fire on the other. As of April 6, 47 A-share listed companies have released forecasts for their 2026 first-quarter performance, with 21 stocks whose year-over-year net profit growth upper limit exceeds 100%. These are mainly concentrated in the electronics, machinery and equipment, and basic chemical sectors.

Multiple leading companies posted losses exceeding 10 billion

Based on the currently disclosed 2025 A-share annual reports or pre-announcements, a clear pattern of differentiation emerges. On one side, more than 1,440 companies are falling into losses, and multiple leading companies posted losses exceeding 10 billion. On the other side, some companies’ net profit growth exceeds 10 times.

The 2025 A-share loss-making industries are mainly distributed across real estate, photovoltaic power, home furnishing retail, and consumer electronics. Among them, 54 real estate developers are expected to post losses, with the industry’s cumulative losses exceeding 200 billion yuan. Specifically, Zhifei Biological is expected to post losses in the mid value of over 12 billion yuan, driven by the vaccine industry entering a deep adjustment period; sales of its main products have fallen short of expectations. TCL Zhonghuan, although photovoltaic newly added installation volume remains in growth, still faces ongoing imbalances in supply and demand overall, with losses exceeding 8 billion yuan. Because the company’s control rights over Unisemiconductor are still in a restricted state for now, Wintop Technology is expected to recognize a sizable amount of investment loss, or more than 10 billion yuan.

Judging from the performance outlook of 2026 first-quarter reports so far, among the companies with expected declines in performance, Taijin New Energy in the machinery and equipment industry is expected to see a mid-value decline in net profit of more than 50%, with a net profit mid value of about 40 million yuan. Feilong Automobile, affected by factors such as adjustments to tariff policies, has its profit space continuously squeezed; it is expected to see a mid-value decline in profit of more than 50%, with a net profit mid value of about 60 million yuan. MuXi Shares is expected to post a first-quarter loss of 136 million yuan; compared with last year’s same period loss of 233 million yuan, the loss has decreased. In the optical and optoelectronics concept space, Shiya Technology is expected to reduce losses by 15.53% to 27.60%, with a net profit mid value of a loss of about 60 million yuan. Chuanjinno, Shangshui Intelligent, and MorningBio all see a decline in net profit.

Need to be wary of inflated growth

In sharp contrast to the wave of losses is that some companies have delivered explosive growth.

High-growth companies in the 2025 annual reports are concentrated in sub-sectors such as veterinary drugs, defense and military industry, new materials, and AI applications, and generally benefit from a rebound in demand, lower costs, and turning losses into profits. CATL leads with net profit of 72.2 billion yuan, while resource stocks such as Zijin Mining and Luoyang Molybdenum are also among the top in profitability. The 2026 first-quarter net profit growth leaders list also has highlights. High-growth companies are mainly concentrated in areas such as pharmaceuticals, high-end manufacturing, and non-ferrous metals, benefiting from product price increases, capacity release, and lower costs. Demingli turned losses into profits, and is expected to post net profit of 3.15 billion to 3.65 billion yuan, with the highest year-over-year growth rate reaching 5,383%; Fuxiang Pharmaceutical is expected to see net profit growth of 22.23% to 32.50%; Oukey is expected to have an upper limit of 2,771% year-over-year growth.

Insiders remind that investors need to be wary of inflated growth. Some companies’ high growth rates stem from the low base of last year’s huge losses; their actual profit scale is only a few tens of millions of yuan, which lacks sustainability. Tian Lihui, dean of the Financial Development Research Institute at Nankai University, believes that performance determines intrinsic value, and the stock price fluctuates around value. If loss-making stocks’ core business continues to deteriorate, their stock prices will inevitably fall over the long term; relying only on hype is not sustainable.

[Source: XinKuai News]