Read the balance sheet first, then the headline. The headline this time is a genuinely good one: A-share listed companies posted net profit growth of 19.4 percent in the first half of 2026, the fastest pace since 2022, on 37.74 trillion yuan of combined revenue. Fair enough — that deserves the front page it got. But the aggregate tells you almost nothing about the parts, and the parts are where the money actually moved.
Let me set out the math in order, because the order matters. Revenue across 5,550 companies was up 7.61 percent. Net profit attributable to shareholders came in at 3.58 trillion yuan, up 19.4 percent, crossing the 3.5 trillion mark for the first time. 74.54 percent of companies were profitable. Now pause on that gap: revenue up seven and a half percent, profit up nineteen and a half. That spread is the entire story of this earnings season, and it is not the kind of spread you get from a rising tide lifting every boat.
The spread comes from structure. A market that grows profit two and a half times faster than revenue is not getting richer by accident; it is getting richer because some columns of the ledger are growing at rates that drag the average upward while the rest of the market just keeps the lights on. So the question worth asking is not whether the half-year was good — it was — but which columns did the heavy lifting, and whether the mix is something you can bet on going forward.
The sci-tech board is not a rounding error
Start with the column that jumps off the page: the sci-tech board, or STAR Market, reported revenue of 1.01 trillion yuan, up 38.59 percent, and net profit of 144.87 billion yuan, up 437.59 percent. Let me sit with that number for a second, because a four-hundred-fold percentage can read like a typo. It is not a typo; it is what happens when a depressed base meets a genuine up-cycle in electronics.
The electronics industry as a whole grew net profit 195.11 percent in the half. Inside it, the semiconductor segment grew 607.2 percent. I have been reading these reports long enough to be healthily sceptical about triple-digit earnings growth — it is usually a base effect wearing a mask. But 607 percent is not a single quarter’s arithmetic trick; it is a segment that spent 2024 and 2025 in a down-cycle and is now recovering into a capacity-constrained up-cycle with pricing power on its side.
Here is where I checked myself, because I almost buried this paragraph under a spreadsheet. The semiconductor number is flattered by comparison with a weak prior-year base — that is true, and it is worth keeping in the ledger so the number does not become a fantasy. But strip the base effect out and the direction is still unmistakable. This is the column where the growth came from, and it is also where the R&D went.
The R&D column and the overseas column
Which brings me to the second number that matters: R&D spending across the market crossed 800 billion yuan in the first half. That is a line item a lot of coverage skips, and I do not understand why, because it is the single best predictor I know of where profit growth comes from two years out. You do not spend eight hundred billion yuan on research without intending to collect the revenue later.
Then there is the overseas column, and this is the one I find most interesting as someone who spends my commute reading trade numbers. Combined overseas revenue came to 6.06 trillion yuan, up 22.68 percent, and its share of total revenue rose to 16.05 percent, up two percentage points year on year. That is not a rounding error either. Roughly one yuan in six that these companies earn now comes from outside the domestic market.
I want to be careful here, because it is tempting to dress this up as a triumph and I do not want to. It matters more where the money goes than how loudly anyone celebrates it. Twenty-two percent growth in overseas revenue on a base that large is real commercial traction — real export orders, real local-market pricing, real factories or partners abroad. The point is not patriotism; the point is diversification. A company with a sixth of its revenue earned abroad is less exposed to any single domestic demand shock, and that is exactly the kind of resilience a balance-sheet reader is paid to notice.
The dividend column is the quiet signal
The third column worth reading is the one most coverage treats as filler: dividends. 867 companies announced interim dividends, planning to pay out a combined 716.67 billion yuan. In a season where profit growth is running at a nineteen percent clip, the fact that companies are choosing to hand a meaningful chunk of it back mid-year tells you something about how boards are thinking about their cash.
There was a version of this earnings season, not that long ago, where record profit growth would have been accompanied by record reinvestment into more of the same — more capacity, more leverage, more ambition. The presence of 716.67 billion yuan in planned payouts alongside 800 billion yuan of R&D says something different: these are companies that believe they can both fund the future and return cash to owners today. That is the math of a mature market, and it is the math of a market that has stopped assuming the state will always be the buyer of last resort.
Now, I am a sceptic by default, so let me make the case against my own optimism before I close. The gap between revenue growth and profit growth is flattered by the low base in electronics; the overseas number, strong as it is, still leaves over 80 percent of revenue at home; and the aggregate masks a long tail of companies that are profitable but stagnant. A single half-year does not make a trend, and I have seen too many earnings seasons where the strongest quarter is followed by a reconciliation to write this as a promise.
But here is the thing I keep coming back to, the part where I think the math genuinely works: growth is not coming from one place anymore. It is coming from chips, from research, from exports, and from shareholder returns, all at once. That is the difference between a profit cycle and a structural shift. A profit cycle gives you one good season; a structural shift gives you a reason the ledger looks different at the end of the year than it did at the start.
Let me put my own view on the record, plainly. I read the columns before the headline, and the columns say this: the half-year report is genuinely good, the growth is real but concentrated, and the concentration is in the places — semiconductors, R&D, exports, dividends — where durable value tends to be built. Fair enough — but do not call it a boom until you see whether the second half keeps the structure, not just the pace.
The distribution question nobody asks
There is a question the aggregate hides, and I want to drag it into the open because it changes how you read everything above. 74.54 percent of companies were profitable — that is a healthy majority. But profitability and growth are not the same ledger. A company can be profitable and flat; it can be profitable and shrinking; it can be profitable and quietly losing market share to a competitor whose numbers are worse. The 74.54 percent figure tells you how many companies earned money. It does not tell you how many companies are compounding.
If I had to guess — and I want to be explicit that this is inference from the disclosed structure, not a number I can cite — the growth is even more concentrated than the revenue split suggests. The semiconductor and electronics columns are carrying a disproportionate share of the increment, and the broad middle of the market is doing what the broad middle usually does: holding steady, paying wages, paying dividends, and not moving the needle much in either direction. That is not a criticism of those companies; it is a description of how a 19.4 percent aggregate is assembled from thousands of single-digit contributors and a few double-digit standouts.
I mention this because the most common mistake in reading an earnings season is to take the aggregate temperature and apply it to everything. The right way to use this report is the opposite: treat the aggregate as a door, not a verdict, and walk through it to find which specific columns justify your attention. The column that justifies attention this half-year is the science-and-technology column, full stop. Everything else is context.
What I am not going to do with these numbers
Let me also put on the record what I am deliberately refusing to do with this report, because a healthy sceptic owes the reader his methods. I am not going to forecast the second half based on the first. The H2 cycle is where the base effects get ugly, the export numbers get seasonal, and the comparison with a weak prior year stops flattering. I am not going to extrapolate 437 percent science-board growth into an annual run-rate, because a 437 percent quarter is, by definition, a number that cannot repeat itself at that scale. And I am not going to pretend the overseas revenue story is uniformly distributed — the 16.05 percent share is an average, and averages in export data tend to be dragged up by a minority of genuinely global companies.
What I am willing to say, with the confidence the data actually supports, is narrower. The structure of this earnings season is healthier than the headline alone implies: growth is coming from research intensity, from export diversification and from shareholder returns, not from leverage and not from inventory games. That is the part of the report that will still matter in January, when the second-half numbers come in and the aggregate looks different. The columns are the durable part. The total is the weather.
Read the balance sheet first, then the headline — and then read the balance sheet again after the headline, because the headline will have moved on by Tuesday and the columns will still be sitting there, unchanged, waiting for someone with the patience to open them. The half-year report is not the story. It is the table of contents. The story is in the columns, and this season, the columns are worth the read.
One last arithmetic check, because I want to close the way I opened — with the math. Revenue up 7.61 percent and net profit up 19.4 percent means the profit margin expanded by roughly a full percentage point on a 37.74 trillion yuan base. That is the operating leverage showing up in the ledger, and it is the single number that ties the whole report together: the market did not just sell more, it kept more of every yuan it sold. That, more than any single sector, is why the aggregate looks as good as it does.