By mid-March, listed companies have begun releasing their first-quarter earnings forecasts in quick succession. According to statistics from Choice Data, as of the 13th, 137 listed companies had disclosed their Q1 performance forecasts. A review of these early announcements shows that new-economy enterprises in biopharmaceuticals, high-end manufacturing, the new energy vehicle industry chain and other sectors have become the main drivers of projected profit growth. A total of 122 companies reported positive earnings expectations, accounting for nearly 90%. Strong Growth Momentum in High-End Manufacturing Overall, among the 122 companies forecasting profit growth, 25 enterprises from various equipment and machinery sectors collectively expect earnings to rise. Among them, Huazhong Heavy Industries, which has transformed into high-end equipment manufacturing and achieved a second stage of development, has become the “growth leader” in earnings forecasts. The company expects its net profit for the first quarter of this year to reach between 143 million yuan and 157 million yuan, a year-on-year increase of 2,499.59% to 2,750%. Last year, Huazhong Heavy Industries spent nearly 3 billion yuan acquiring Runxing Technology, a major manufacturer of high-end CNC machine tools in South China, raising the proportion of high-end manufacturing in its overall business, thereby expanding its business scope and upgrading its industrial structure. The company stated that the sharp increase in first-quarter performance was driven by the rapid profit growth from the high-end and intelligent equipment manufacturing business of its wholly-owned subsidiary Runxing Technology. Changhong Technology has also achieved substantial growth in operating performance thanks to a successful transformation. According to its earnings forecast, the company’s net profit in the first quarter of this year will increase by 112.65% to 137.67% year-on-year, mainly due to its transformation into two core businesses: medical and healthcare, and high-end precision manufacturing. The two businesses share resources, coordinate operations, and develop in tandem, creating strong growth momentum. In addition, supported by favorable industry trends, Kelin Environmental Protection, Tianqi Machinery, Lead Intelligent, Jiangte Motor and others all expect their first-quarter performance growth to exceed 100% this year. Benefiting from national policy support for the new energy industry, sales of new energy vehicles have grown rapidly, further driving the sustained and rapid development of the upstream lithium battery industry. Lead Intelligent stated that on the basis of maintaining stable relationships with existing customers, the company has actively expanded new clients, resulting in a significant year-on-year improvement in production and sales performance of lithium battery-related equipment. The company expects its net profit for the first quarter of this year to increase by 80% to 110% year-on-year.

Bright Prospects for the Modern Lighting Industry As a sub-sector of the new economy, the modern lighting industry has achieved rapid overall growth in performance. A number of LED lighting industry chain companies, including Liande Equipment, Tailong Lighting, Cnlight, Leyard and HC Semitek, all expect relatively high year-on-year profit growth in the first quarter of this year. Leyard has also recently received a large number of concentrated investigations from institutions. As a service provider focusing on overall commercial lighting solutions for light and shadow creation, Tailong Lighting stated that in the first quarter of this year, the company continued to promote new product R&D and technological innovation, and further strengthened market expansion. It expects net profit to increase by 80.74% to 110.74% year-on-year. Benefiting from the rapid growth of its LED lighting and charging pile businesses, Cnlight expects net profit in the first quarter to rise by 60% to 100% year-on-year. Leyard, a leader in the "smart display" market, saw a continued increase in orders in the first quarter of this year after its urban landscape lighting orders doubled last year. The company expects net profit of 276 million yuan to 310 million yuan in the first quarter, a year-on-year increase of 60% to 80%. The company's sustained performance growth has also attracted a large number of researchers. Statistics show that the company received investigations from 54 institutions in 7 sessions in January and February this year. Regarding future R&D investment in small-pitch products, the company stated that it will mainly focus on intelligent display and user-friendly operation. The company expects to sign new contracts and win new bids totaling 15 billion yuan in 2018. In terms of performance, it also forecasts revenue exceeding 10 billion yuan and net profit of 1.6 to 2 billion yuan in 2018, with performance targets allocated to each subsidiary; for 2019, it projects revenue of 14 billion yuan and net profit of 2.2 to 2.6 billion yuan. Relevant data shows that the scale of the LED lighting market gradually expanded from 2016 to 2019, exceeding 30 billion US dollars in 2018. The global LED lighting market is expected to achieve a compound annual growth rate of 12% from 2017 to 2021. Industry insiders noted that small-pitch products will undoubtedly remain the main force in the 2018 LED display market competition. From a general trend, as China further implements the innovation-driven development strategy, intelligence will continue to be one of the development trends of commercial lighting this year.