China Equity Strategy_ 3Q24 Interim Earnings Review_ Larger Misses than 2Q24 as Expected

Key Takeaways Industry or Company Involved - The document focuses on the Chinese equity market, specifically analyzing the earnings season for the third quarter of 2024. Core Points and Arguments - Earnings Misses: The document highlights that the third quarter earnings season for Chinese equities missed consensus expectations. This is the 13th consecutive quarterly earnings miss, marking the longest streak since 2018. - Sector Performance: Most sectors missed expectations, with Energy, Industrials, IT, and Materials experiencing double misses. Financials was the only sector to beat expectations. - Revenue Misses: Revenue also missed consensus expectations, with Energy and Healthcare experiencing double misses. Consumer Staples, Industrials, and IT missed by one measure. - Downward Revisions: The document expects further downward revisions to consensus earnings estimates due to the continued misses and subdued macroeconomic conditions. - Earnings Growth Forecasts: Morgan Stanley's new earnings growth forecasts for MSCI China are 7% and 11% in 2024 and 2025, respectively, compared to consensus at 15% for 2024 and 11% for 2025. Other Important Points - A-shares: A-shares showed a worse result pattern compared to MSCI China, with a higher number of companies missing earnings expectations. - Geopolitical Uncertainties: The document mentions lingering deflationary pressure and geopolitical uncertainties as factors contributing to the earnings misses. - Policy Clarity: The document emphasizes the need for more policy clarity to alleviate the current economic challenges. References - [11] - [12] - [13] - [14] - [40] - [41] - [42] - [43] - [44] - [45] - [46] - [47] - [48] - [49] - [50] - [51] - [52] - [53] - [54] - [55] - [56] - [57] - [58] - [59] - [60] - [61] - [62] - [63] - [64] - [65] - [66] - [67] - [68] - [69] - [70] - [71] - [72] - [73] - [74] - [75] - [76] - [77] - [78] - [79] - [80] - [81] - [82] - [83] - [84] - [85] - [86] - [87] - [88] - [89] - [90] - [91] - [92] - [93] - [94] - [95] - [96] - [97] - [98] - [99] - [100] - [101] - [102] - [103] - [104] - [105] - [106] - [107] - [108] - [109] - [110] - [111] - [112] - [113] - [114] - [115] - [116] - [117] - [118] - [119] - [120] - [121] - [122] - [123] - [124] - [125] - [126] - [127] - [128] - [129] - [130] - [131] - [132] - [133] - [134] - [135] - [136] - [137] - [138] - [139] - [140] - [141] - [142] - [143] - [144] - [145] - [146] - [147] - [148] - [149] - [150] - [151] - [152] - [153] - [154] - [155] - [156] - [157] - [158] - [159] - [160] - [161] - [162] - [163] - [164] - [165] - [166] - [167] - [168] - [169] - [170] - [171] - [172] - [173] - [174] - [175] - [176] - [177] - [178] - [179] - [180] - [181] - [182] - [183] - [184] - [185] - [186] - [187] - [188] - [189] - [190] - [191] - [192] - [193] - [194] - [195] - [196] - [197] - [198] - [199] - [200] - [201] - [202] - [203] - [204] - [205] - [206] - [207] - [208] - [209] - [210] - [211] - [212] - [213] - [214] - [215] - [216] - [217] - [218] - [219] - [220] - [221] - [222] - [223] - [224] - [225] - [226] - [227] - [228] - [229] - [230] - [231] - [232] - [233] - [234] - [235] - [236] - [237] - [238] - [239] - [240] - [241] - [242] - [243] - [244] - [245] - [246] - [247] - [248] - [249] - [250] - [251] - [252] - [253] - [254] - [255] - [256] - [257] - [258] - [259] - [260] - [261] - [262] - [263] - [264] - [265] - [266] - [267] - [268] - [269] - [270] - [271] - [272] - [273] - [274] - [275] - [276] - [277] - [278] - [279] - [280] - [281] - [282] - [283] - [284] - [285] - [286] - [287] - [288] - [289] - [290] - [291] - [292] - [293] - [294] - [295] - [296] - [297] - [298] - [299] - [300] - [301] - [302] - [303] - [304] - [305] - [306] - [307] - [308] - [309] - [310] - [311] - [312] - [313] - [314] - [315] - [316] - [317] - [318] - [319] - [320] - [321] - [322] - [323]