It's time to focus on deepening performance.

How can investors identify the true drivers of performance growth from financial reports?

By Zhang Ju | Edited by Lin Weiping

Spring has arrived in March, with grass growing and orioles flying! This week, the 2026 National Two Sessions concluded successfully. This important event, marking the start of the “14th Five-Year Plan,” not only set clear goals for the country’s economic and social development but also sent clear policy signals to the capital markets.

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For many investors, understanding policy directions from the Two Sessions amid complex market environments, interpreting the true performance of listed companies through financial reports, and finding high-quality targets with genuine growth are key to preserving and increasing assets.

Especially in cultivating new productive forces, the government work report explicitly states the goal of developing emerging pillar industries such as integrated circuits, aerospace, biomedicine, and low-altitude economy, as well as nurturing future industries like new energy, quantum technology, and embodied intelligence. This means that listed companies in related fields will benefit from both policy dividends and market demand, becoming “potential stocks” for performance growth.

Taking the biomedicine sector’s innovative drugs as an example, these companies will enjoy the policy benefits and are expected to see performance realization, with advantages in valuation and shareholding. As of this week, several companies have disclosed first-quarter performance forecasts showing significant increases, indicating a good momentum for blockbuster innovative drugs to expand insurance coverage, boosting industry confidence. For instance, one industry leader, Ailis, which recently announced its first-quarter results, expects revenue, net profit attributable to shareholders, and non-recurring net profit to grow by over 40% year-on-year.

Looking at the 2025 annual reports released simultaneously, as of March 12, 77 A-share companies have disclosed their 2025 annual reports. Data shows that 65 companies reported profits, accounting for 84%, with total revenue reaching 1.89 trillion yuan, up 32.1% year-on-year; total net profit approximately 168 billion yuan, up 47.8%.

Among the top three in net profit are CATL, Foxconn Industrial Internet, and ZTE Corporation. Notably, CATL’s annual report disclosed this week shows a net profit attributable to shareholders of about 72.2 billion yuan, up approximately 42%, with a total dividend payout plan of about 31.5 billion yuan. Following the release of this excellent report, the company’s stock price rose by more than 5% in two consecutive days.

The excitement may still be ahead. For tech stocks surging in 2025, after a series of dazzling concept plays, annual reports will be the best test of their actual performance. Whether it’s overseas computing power represented by NVIDIA’s chain or domestic computing power like Huawei’s Ascend, as well as liquid cooling, robotics, AI applications, and more, profitability is a key focus and a major factor influencing investors’ decisions later on. Overall, sell-side analysis suggests that hard-tech companies are likely to outperform soft-tech ones.

In the upcoming earnings season, strong companies may shine with both annual and first-quarter reports. However, some companies with poor annual results might show signs of recovery in the first quarter. For investors, referencing the first quarter results this year is more important in such scenarios; this approach also aligns with institutional strategies, as annual reports generally extend from the third quarter of the previous year. Comparing the two, this year’s first-quarter reports better reflect companies’ new initiatives and are likely to serve as a basis for future institutional investments.

Of course, when focusing on performance, investors must avoid superficial analysis. It’s essential to deeply understand the reasons behind surface growth and the underlying drivers of profitability. For example, operating revenue is the foundation of a company’s performance and the first indicator investors should watch. Consistently stable revenue growth often reflects sound management and strong market competitiveness. However, investors should not only look at the surface numbers but also analyze the quality of revenue growth. Some listed companies’ revenue increases may rely on short-term factors like low-price competition or government subsidies, which lack sustainability. Companies that achieve revenue growth through product innovation and market expansion, on the other hand, possess long-term investment value.

The 2026 National Two Sessions have injected new vitality into the capital markets and pointed investors in the right direction. In an era of “deepening performance,” investors should align with the Two Sessions’ trends, use financial reports as a measure, and precisely select valuable listed companies to grow together with enterprises!

(This article was published in the March 14 edition of “Securities Market Weekly.” The mentioned stocks are for illustrative purposes only and do not constitute investment advice.)