ChiNext index down over 3%

ChiNext index down over 3%

The ChiNext index, a benchmark for Chinese technology and growth companies, experienced a notable decline of 3.1% to 2,920.48 points on July 2, 2025. This drop follows a period of strong performance, with the index previously rising 1.1% to 2,920.48 points in early July [1].

The decline in the ChiNext index can be attributed to various factors, including the broader macroeconomic environment and sector-specific challenges. The agricultural sector, particularly the Agricultural Bank of China (ABC), reported a 2.7% net profit increase to RMB139.94 billion in the first half of 2025, outperforming peers despite a challenging macroeconomic environment [2]. This performance underscores ABC’s strategic positioning and operational adaptability in a post-pandemic banking landscape. Historical backtesting of ABC’s earnings release dates from 2022 to 2025 reveals a 40.00% 3-day win rate and 40.00% 30-day win rate, suggesting short-term and medium-term volatility but potential for gains with patience.

Meanwhile, Chinese electric vehicle (EV) maker BYD's second-quarter profit fell 29.9% from a year earlier, ending a 3-1/2 year growth streak. Net profit at the world's biggest EV producer hit 6.4 billion yuan ($894.74 million) while revenue increased 14% to 200.9 billion yuan in the three months to June 30 [3]. This decline in profit highlights the challenges faced by the EV sector, which may have contributed to the broader market sentiment. However, backtesting of BYD’s earnings release dates from 2022 to 2025 shows a stronger historical performance, with 66.67% 3-day and 10-day win rates, indicating a higher likelihood of short- to medium-term gains following earnings announcements.


The ChiNext index’s decline also reflects broader market concerns about the economic outlook and sector-specific challenges. The agricultural sector, while performing well, faces margin pressures and real estate sector challenges. The digital transformation and rural revitalization strategies employed by ABC, among others, are positioning the bank to capitalize on China's 5.3% GDP growth in H1 2025, driven by manufacturing and exports [4].

Looking ahead, investors should closely monitor the performance of key sectors and companies within the ChiNext index. The resilience demonstrated by companies like ABC in the face of macroeconomic headwinds suggests that the index may be poised for recovery, particularly if the broader economic conditions improve. For investors considering earnings-driven strategies, the historical performance of ABC and BYD—highlighted by their respective win rates—provides context for balancing short-term opportunities (BYD’s 66.67% 3-day win rate) with longer-term positioning in resilient sectors like banking (ABC’s 40.00% 30-day win rate).

References
[1] China’s ChiNext index rises 1.1% to 2,920.48 [https://www.ainvest.com/news/china-chinext-index-rises-1-1-2-920-48-2509/]
[2] Agricultural Bank of China Limited Reports Earnings Results for the Half-Year Ended June 30, 2025 [https://www.marketscreener.com/news/agricultural-bank-of-china-limited-reports-earnings-results-for-the-half-year-ended-june-30-2025-ce7c50ddda8dfe2d]
[3] Chinese electric vehicle maker BYD's quarterly profit falls for first time in 3-1/2 years [https://www.tradingview.com/news/reuters.com,2025:newsml_L4N3UL0VV:0-chinese-ev-maker-byd-s-quarterly-profit-falls-for-first-time-in-3-1-2-years/]
[4] China's Economy in H1 2025: Resilience Amidst Uncertainty [https://behorizon.org/chinas-economy-in-h1-2025-resilience-amidst-uncertainty/]