Skeptics Scour Chinese Earnings for Return to Conviction Call
- Skeptics seek strong corporate performance for rally to extend
- Gains in stocks following earnings beats have soon fizzled
While the latest data released this week showed that the economy is recovering, the property sector remains a major drag. Housing sales plunged 33% by value in the January-February period from a year ago.
Source: Bloomberg
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As Chinese stocks bottom out after months of selling, investors are sifting through earnings for signs of a sustainable recovery. The early evidence is less than convincing.
With results released from about a quarter of MSCI China members, they have beaten aggregate expectations by 12%, according to Bloomberg Intelligence. But, a quick cooling in some stock gains after better earnings for companies including Li Auto Inc. points to doubts over corporate resilience.