The Zhitong Finance App learned that CITIC Securities released a research report saying that the 2026E and 2027E net profit forecasts for electronics and semiconductors continued to improve, and machinery stabilized after the previous increase; the downsizing of telecommunications and automobiles narrowed, and the downsizing of food, beverages and household appliances increased. Combined with the three-quarter report, Electronics' Q4 profit share requirements were lower than manufacturing and consumption, and small markets, telecommunications, and automobiles were more dependent on fourth quarter profits. It is recommended that priority be given to the fulfillment of profits in the electronics industry, tracking the stability of machinery forecasts and banks' profit contributions to dividends, while manufacturing and consumption focus on the decline in forecasts and profit recovery in the fourth quarter.
CITIC Securities's main views are as follows:
Index level: The net profit forecast for all A is basically the same, and there is a correction differentiation between large and small markets.
1) The full A2026E and 2027E net profit forecasts for October were revised by − 0.17% and +0.04% respectively, while revenue forecasts were revised down by 0.32% and 0.04%, respectively. The increase in the 2027E net profit forecast fell from 2.35% in August to 0.55% in September and 0.04% in October, and the improvement in profit expectations slowed significantly.
2) The 2027E net profit forecast for the Shanghai and Shenzhen 300 was revised up by 0.24%, and the 2026E and 2027E net profit forecasts for the China Securities 500, 1000, and 2000 were all revised downgraded, and the China Securities 2000 was revised by 1.06% and 1.01%, respectively. The Q4 profit share deviation for China Securities 1000 and 2000 was 32.40 and 37.95 percentage points, respectively, and the Shanghai and Shenzhen 300 was 5.38 percentage points. The profit fulfillment requirements for the fourth quarter of the small market were even higher.
3) The 2027E net profit forecast for Kechuang 50 was revised by 1.41%, while GEM and Shuangchuang 50 were lowered by 1.66% and 1.52% respectively; the China Securities dividend was raised by 0.27%. The 2027 profit is expected to increase by 3.6%, and the bank contributed 3.78 percentage points. The internal correction and differentiation of technology, and dividends focus on the stability of banks' contributions.
At the industrial level: Technology's net profit forecast continues to improve, and manufacturing and consumption are still declining.
1) TMT and Midstream Manufacturing 2027E profits are expected to increase by 41.9% and 31.5% respectively, contributing a total of 63.0% of the total A profit increase; in October, the 2027E net profit forecasts were revised up by 1.50% and down 1.35% respectively. Both are the main sources of profit growth in 2027, but the forecast adjustments are in the opposite direction.
2) TMT's 2026E and 2027E net profit forecasts were continuously revised from July to October. The 2027E upgrade fell from 15.47% in August to 1.50% in October. The October increase mainly comes from electronics, computers and media. The 2027E profit for downstream consumption is expected to increase by 28.5%, but the 2026E and 2027E net profit forecasts have continued to be revised since February, and by 1.41% and 0.84% respectively in October.
3) The Q4 profit share deviation for midstream manufacturing, downstream consumption, and infrastructure real estate was 20.81, 18.57, and 33.12 percentage points, respectively, higher than the revenue share deviation. Profit targets for 2026 are mostly dependent on profit recovery in the fourth quarter, and the restoration of manufacturing and consumption still needs to be judged based on actual performance.
Industry level: The net profit forecast for electronic semiconductors has been revised strongly, and internal segmentation of manufacturing consumption is obvious.
1) Net profit forecasts for electronics 2026E and 2027E were revised by 2.91%, semiconductors by 4.56% and 3.85% respectively, and components 2027E by 3.07%, respectively. Electronics and semiconductors' share of Q4 profit deviated by 4.63 and -5.70 percentage points, respectively. The fourth quarter fulfillment requirements were lower than those of Denshi and Automobiles.
2) The net profit forecast for machinery remained flat in October after being revised in September; the net profit forecast for Denxin and Automobile 2027E was revised down by 2.84% and 0.51% respectively in October, which is narrower than in September, but the share of Q4 profit deviates by 30.24 and 32.60 percentage points. Machinery focused on the stability predicted after the upgrade, while Denshin and Automobile focused on delivering profits in the fourth quarter.
3) The 2027E net profit forecast for food, beverage, and home appliances was revised downwards to 2.00% and 5.49%, and the light industry manufacturing downgrade narrowed to 2.73%; pharmaceuticals were revised upwards, but the increase was concentrated, and the total for the rest of the samples was lowered. In the procyclical industry, the net profit forecast for petroleum and petrochemical 2027E is clearly revised, while non-ferrous metals are still being revised downwards.
Risk factors:
Analysts' forecast deviations and profits fell short of expectations; insufficient sample coverage and differences in industry and index composition structures; changes in the macro environment, industrial policy, and industry sentiment exceeded expectations, etc.