A quarter of China-listed companies logged net losses in the first half of this year despite overall net profit growth of around 20% in the group, with chipmakers surging on artificial intelligence-related demand while other sectors slumped.

A sluggish economy and price wars took their toll on property groups, automakers and food companies.

Total net profits at around 5,400 companies listed on mainland exchanges rose 22% to RMB 1.9 trillion (USD 282.6 billion), bringing first-half growth into double digits for the first time in five years. The tally excludes financial companies.

AI server demand was a tailwind for China’s semiconductor industry. The parent of chipmaker ChangXin Memory Technologies (CXMT) posted a net profit of RMB 77.6 billion (USD 11.5 billion), up from a net loss of RMB 2.3 billion (USD 342.1 million) in the same period a year earlier.

The company accounted for around a quarter of overall improvement in earnings, and it became the China’s most valuable listed company after an initial public offering in July.

Profit at Cambricon Technologies, sometimes referred to as China’s Nvidia, more than doubled. The AI chipmaker is branching out into areas including chip materials and production equipment.

Resource companies such as state-owned PetroChina also joined electronics makers in the top ranking for improved profits. Profitability rose as crude oil prices soared amid tensions in the Middle East. Precious metals such as gold and copper, and commodities like lithium, highlighted the impact of rising raw material costs.

Profits declined at listed Chinese companies for three consecutive years through 2025. For the full year through December 2026, profits could rise by around 15%, according to Meng Lei, China equity strategist at UBS Securities, who believes earnings trends have reached a turning point, led by tech companies.

“But this positive earnings story is not broad-based,” said William Bratton, head of cash equity research at France’s BNP Paribas, adding that growth was “still focused on the country’s production complex.”

More than half the companies, or about 2,700, saw earnings decline in the first half. Net losses were recorded at 1,411 companies, a roughly 10% rise from a year earlier. That number is the highest ever logged for the period, at around 26% of the total.

Real estate group China Vanke had the biggest loss at RMB 14.9 billion (USD 2.2 billion). While the housing market is looking up in Shanghai and some other big cities, prices for new homes remain low. Of 104 property companies, 60 reported net losses.

Real estate accounts for more than half of Chinese household assets. Consumers are getting thriftier as asset prices fall, and companies are resorting to profit-killing price competition.

Supermarket chain Yonghui Superstores has been forced to close underperforming stores, and revenue dropped 20%.

Profitability has declined for electric vehicle makers as well. Domestic leader BYD reported a 21% drop in net profit. Seres Group, a new energy vehicle maker that works with Chinese tech group Huawei, swung to a net loss.

The biggest decline in earnings among China’s listed companies was at Muyuan Foods, a major pork producer. The company posted a RMB 6 billion (USD 892.5 million) loss, compared with a RMB 10.5 billion (USD 1.6 billion) profit in the same period last year.

Solar panel makers have been caught up in a price war as well. JinkoSolar was one of several that sank deeper into the red. Expectations were high due to rising demand for renewable energy because of the Iran war, but loss-making companies in the sector nearly doubled, reaching 73.

China’s five-year economic plan through 2030 includes improved productivity and industry modernization through AI. Yet analysts at US think tank Rhodium Group say the country’s high-tech industries “remain too small relative to traditional sectors such as property and infrastructure investment.”

This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.

Note: RMB figures are converted to USD at rates of RMB 6.72 = USD 1 based on estimates as of September 24, 2026, unless otherwise stated. USD conversions are approximate and, where appropriate, rounded for ease of reference. They may not fully match prevailing exchange rates.