UBS sees muted China earnings growth in Q2, tech sector stands out

Published 25/09/2025, 11:46
© Reuters.

Investing.com - Chinese companies listed in the MSCI China index reported modest earnings growth of 3% year-over-year in the second quarter of 2025, while revenue growth remained flat, according to a new report from UBS.

Expectations were already low heading into the earnings season, with fiscal year 2025 earnings forecasts revised upward by just 1% over the past month, primarily driven by improvements in the financial sector, UBS noted in its analysis.

Non-bank financials, technology, and healthcare sectors demonstrated the strongest performance in both top-line and earnings results during the second quarter, while internet companies maintained high single-digit earnings growth despite broader market challenges.

Company guidance appeared "relatively more positive" according to UBS, with many firms emphasizing cost control measures and more disciplined pricing strategies following anti-involution campaigns in China, though specific details on these initiatives were not provided.

Technology companies emerged as the standout performers in the quarter, delivering strong earnings growth accompanied by the most optimistic management commentary among all sectors, positioning them favorably against the backdrop of otherwise muted overall market performance.

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