Morgan Stanley expects Chinese companies’ Q2 profits to improve after a stronger
Q1, as rising exports and early reflation boost revenues. In Q1, the gap between
firms missing and beating estimates narrowed to 12.5% from 23.2% previously. A
sustained earnings recovery and broader economic growth could extend rallies
beyond tech, supported by a strong capex cycle driving demand in capital goods
sub-sectors, with conditions likely improving after summer.
