For Q1 2020, the quarterly earnings of Shanghai’s SSE Composite index decreased -22.1% (year-over-year). The quarter was especially difficult for energy companies (e.g. Sinopec posted a huge quarterly loss) and for airlines which is hardly a surprise for anyone. If financial companies are excluded, the quarterly decline in earnings was a staggering -59.9% when compared to the same period of last year. The SSE index is considered as the benchmark index for the mainland China’s equity market.
Note: The earnings that are used for the calculations below are operating earnings that exclude unusual expenses, interest expenses and taxes.
SSE Composite Index – Quarterly Opearting Earnings & Earnings Growth
Shanghai Composite Index: Quarterly Earnings Growth in Q1 2020
The first quarter of the year 2020 was very difficult for Chinese companies for obvious reasons. The combined operating earnings of companies listed on the Shanghai stock exchange decreased -22.1% compared the same period of the previous year.
If financial companies are excluded, the quarter was even more horrible. Operating earnings of non-financial companies declined -59.9% (year-over-year). Sinopec (China Petroleum & Chemical Corp) posted a huge quarterly operating loss of nearly US$3.8 billion. In Q1 2019, the company’s quarterly operating profit was US$3.7 billion. The other energy giant of China, PetroChina Co, also posted a large loss (quarterly operating loss of US$480 million).
All major airlines in China also posted hefty losses (China Southern Airlines reported a quarterly loss of US$840 million and Air China a loss of US$460 million.)
How the data has been calculated?
The quarterly earnings that are used by Siblis Research are the total quarterly operating earnings of all companies belonging to the SSE composite index. Operating earnings are calculated as gross income deducted by operating expenses. The operating expenses include selling, marketing, general and administrative expenses. The operating expenses do not include unusual expenses, interest expense and income taxes.