Key facts
- Chinese firms' profit margins stabilized at about 4.5% in the first half of 2026, below global peers' nearly 9%.
- Cambricon Technologies' stock has risen 113% in 2025.
- Cambricon's first-half revenue leaped to 2.9 billion yuan from 64.8 million yuan a year earlier.
- Cambricon swung to a profit of about 1 billion yuan in the first half of the year.
- Chinese battery exports have surged over 220% in recent months.
- Chinese firms secured battery storage deals totaling nearly 200 gigawatt-hours in the first half of the year.
China's corporate sector is showing signs of weakness compared to pre-pandemic levels, but the nation is poised to benefit from the global artificial intelligence boom due to its substantial power capacity, according to a survey by Natixis and a separate research report. Profit margins for Chinese firms have stabilized around 4.5% in the first half of 2026, significantly trailing the nearly 9% achieved by their international counterparts.
Meanwhile, AI chip designer Cambricon Technologies has seen its stock more than double in August, despite potential passive selling triggered by a reshuffle in a key Chinese tech index. Investors are showing strong demand for Cambricon, with its shares rising 113% in 2025. The company's valuation, trading at 521 times trailing earnings, is considerably higher than Nvidia's approximately 50 times. Cambricon's first-half revenue surged to 2.9 billion yuan from 64.8 million yuan a year prior, with a swing to a profit of about 1 billion yuan.
Analysts believe that technical adjustments are unlikely to derail China's AI sector growth, which is supported by government backing for domestic innovation, breakthroughs like DeepSeek, and significant AI spending by tech giants such as Alibaba, Tencent, and Baidu. This optimism suggests China's AI industry may have passed a turning point and entered a self-sustaining cycle of investment and profitability.
Separately, China's battery sector is experiencing a boom in exports, with shipments increasing by over 220% in recent months. Despite facing challenges like tariffs in some markets, Chinese firms have secured hundreds of gigawatt-hours in battery storage deals globally in the first half of the year. A significant portion of their overseas production, over 80%, is now located in Southeast Asian hubs, a strategic pivot to navigate global trade dynamics and overcapacity issues that previously idled factories.