China’s economic forecasts have grown in 2023-analysts
2022.12.02 02:00
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China’s economic forecasts have grown in 2023-analysts
Budrigannews.com – Due to expectations that the Chinese economy will benefit from stimulus measures and reduce restrictions related to the coronavirus, analysts are raising revenue forecasts for Chinese companies in 2023.
In November, analysts estimated a forecast 12-month profit growth of companies in the MSCI China index by 2 percent.
Earlier, their annual income decreased by 15 percent in January-October of this year due to concerns about a slowdown in growth. According to Refinitiv, the revenues of the largest and medium-sized Chinese companies with a capitalization of less than $ 1 billion are expected to increase by an average of $17.3 in 2023, which will be the second largest compared to India.
“A significant easing of coronavirus restrictions is expected in the first quarter.” UBS strategist James Vaughn said: “We forecast a 15-20% profit increase for the Chinese MSCI, which will support lower commodity prices, an improving economy and a reduction in asset write-offs.”
He added that “This could trigger 25-30 percent of the total income of market shareholders next year.” The number of coronavirus cases in China has so far reached a record. However, a surge of hope is expected due to the fact that large towns, for example, Guangzhou, have recently removed the coronavirus.
According to Vice Premier Sun Chunlan, the ability of the virus to spread is decreasing. According to IBES, consumer goods and discretionary services are leading in the profit forecast for the coming year, predicting a net profit growth of about 35 percent each.
According to Wong from UBS, in 2023 consumption will still be the most important opportunity for Chinese stocks, as consumers have increased their savings in recent years in an uncertain macroeconomic situation. According to IBES, technological enterprises and industrial sectors are also expected to grow by 30% and 23%.
The company expects revenue growth in the technology sector if it completes the cybersecurity investigation and resumes issuing licenses for online games, as well as resolving the dispute over the possibility of US access to Chinese audits. After obtaining a license from the Chinese regulator to distribute 70 online games, including titles from the largest Internet companies “TencentHoldings” and “NetEast Inc”.
Real estate expects that recent support measures, such as extending the repayment period of loans, will support the market, which is expected to grow almost 10 times this year. Last week, regulators allowed listed real estate companies to finance capital.
MSCI’s forward 12-month earnings price index in China was 9.55, which is significantly lower than the 10-year average of 11.29. MSCI has lost 29.3 percent this year.
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