In the second half of 2025, all A-share non-financial listed companies will face severe exchange problems.
54.7 billion. This number is not an ordinary macro data. It happens to be the year-on-year increase in exchange losses of all A-share non-financial listed companies in the second half of 2025. During the same period, the net profits attributable to parent companies of these companies decreased by 54.5 billion yuan year-on-year. The almost identical number means that the money earned by listed companies in the second half of last year was basically “eaten” by exchange rate fluctuations. This is also the real mathematical core of the “increase in revenue but not profit” of export companies in the past year.
Although revenue is growing, profits are quietly lost in the exchange process, forming an invisible and continuous “blood tank.”
However, when this “bleeding point” began to be systematically stitched up by the policy side, a repair project for the profit statements of export companies was launched.
In the first four months of 2026, the scale of foreign exchange derivatives transactions of national enterprises increased by 22% year-on-year, and the foreign exchange hedging rate exceeded 33.6%, an increase of 3.7 percentage points from 2025.
The data from Shandong, a major foreign trade province, is even more outstanding. During the same period, the hedging rate directly reached 38.3%, a jump of 8.3 percentage points from 2025.
The hedging rate is not just a “good-looking” number, it directly changes the transmission chain of the income statement.
In the first quarter of 2026, when the cumulative appreciation of the RMB is about 3%, the financial data of companies with insufficient hedging coverage in the first quarter are almost all “exploding”, while companies with mature governance are “making a fortune silently”. This differentiation has forced the market to reprice “certainty”.
Take Linglong Tire as an example. In the first quarter of 2026, its revenue was 6.057 billion yuan, a year-on-year increase of 6.33%. However, the profit side was hit hard by exchange rate risks. Pre-tax exchange losses were as high as 267 million yuan, which directly devoured 95% of the net profit attributable to the parent company for the period, leaving only a profit of 16.8935 million yuan as thin as a piece of paper.
BYD’s situation is also not optimistic. In the first quarter, financial expenses increased by 4.01 billion yuan year-on-year due to exchange losses, and net profit attributable to the parent company fell by 55.4% year-on-year.
Such enterprises have large overseas revenue exposure, relatively thin profit base, and insufficient hedging coverage. When the RMB appreciates by nearly 8% from April 2025 to the end of the year, exchange rate fluctuations act like an amplifier. While revenue figures rise, financial expenses are also rising, but the difference between the two is narrowing.
However, those companies that have established mature foreign exchange governance systems are almost unscathed in the same exchange rate environment.
Among all A-share overseas companies, only 4.4% are “mature governance” companies, concentrated in the electronics and home appliance sectors.
The fluctuation range of exchange gains and losses of this type of enterprise is more than 60% lower than the industry average. Against the backdrop of a 3% appreciation of the RMB in the first quarter of 2026, there are almost no large exchange losses.
LONGi Green Energy’s annual report disclosed that it has implemented a management system of “overseas local currency collections + natural hedging of local operating expenses + full coverage of residual exposure derivatives”. In 2025, exchange gains and losses will narrow by 76% year-on-year, and net profits in the first quarter of 2026 will be enviable.
The direct effect of an increase in hedging ratio on the income statement depends on the size of overseas income exposure and the industry’s net interest rate base.
The greater the exposure and the thinner the net interest rate, the greater the profit elasticity caused by the narrowing of exchange losses.
Judging from the sub-industry data for the whole year of 2025, the pressure on exchange losses in the machinery and equipment industry is the heaviest. In the fourth quarter of 2025, the exchange losses in a single quarter accounted for -31.5% of the net profit attributable to the parent company. The annual exchange losses in the overseas automobile sector accounted for about 22% of the net profit. The home appliances and textiles and home furnishings export track accounted for 7%-15%. However, in the high-end equipment tracks such as AI hardware and photovoltaic energy storage, this ratio was only 3%-7%, which inherently has low volatility.
When the market-wide hedging rate increases from about 30% in 2025 to 33.6% in the first four months of 2026, the magnitude of profit release in different tracks is obviously different.
In the textile and clothing, light industry, and tire sectors with low gross profit and high exposure, the hedging rate of leading companies has increased from about 50% to the 70%-90% range. The hedging rate of the entire sector has increased by 15 to 20 percentage points on average. Exchange losses have narrowed by 70% to 90%. The annual net profit margin released is about 18 billion yuan, which is equivalent to 15% to 20% of the total net profit of the corresponding sector in 2025.
For automobiles going overseas, exchange losses have narrowed by about 40%-60%, releasing an annual profit margin of 8-10 billion yuan, accounting for 8%-12% of the sector’s net profit.
As for the AI hardware and green equipment tracks, the original hedging coverage rate exceeds 60%, with room for further improvement of less than 10 percentage points. The profit release brought about by improved exchange rates accounts for less than 3% of the sector’s net profit. Their valuation story lies more in “growth certainty.”
Market pricing has responded quickly to this logic.
UBS Securities directly raised the overall profit growth forecast of A-shares in 2026 from 8% to 11%, and estimated that the compound growth rate of overseas income of leading overseas companies such as wind power, energy storage, and photovoltaics in the next five years can reach 20%-30%, and the long-term valuation of relevant companies has at least 30% room for repair.
Tianfeng Securities believes that the current A-share export companies have entered the stage of “global local operations” from “simply selling goods overseas”. The traditional local trade valuation framework is completely invalid. The three main export lines of “new energy + high-end equipment + digital economy” should gradually enjoy the valuation premium of multinational companies.
Financial actions also confirm this story. QFII has significantly increased its A-share holdings for two consecutive quarters since the fourth quarter of 2025. At the end of the first quarter of 2026, the value of its stock holdings reached 221.201 billion yuan, a sharp increase of 19.79% from the previous quarter. In addition to food and beverages, communications, media, and high-end manufacturing and export-related tracks are the focus of increasing positions.
On the public fund side, almost all of the top 20 active equity products in terms of performance this year are deeply tied to the high-prosperity track of exports.
What’s even more interesting is that capital inflows are changing from “thematic bets” to “allocation needs.”
At the end of May, northbound funds maintained a net inflow in the hard technology export sector, with flexible foreign capital net inflows exceeding 800 million yuan per week. Export leaders such as Zhongji InnoLight and Xinyi Sheng became the targets with the most active northbound transactions.
Foreign exchange reserves increased by US$31.7 billion in a single month to US$3,442.2 billion, and the current account surplus supported the continued inflow of cross-border capital into RMB equity assets.
In May 2026, the export growth rate in U.S. dollars reached 19.4%. The export of mechanical and electrical products increased by 20.4% year-on-year, hitting a historical monthly high. The year-on-year growth rate of integrated circuit exports soared by 110.9%.
The background of these figures is the massive return of U.S. dollar income, the strong demand for foreign exchange settlement by enterprises, and the increase in hedging rates so that these incomes are no longer “discounted” when converted into RMB profits.
The problem now is that the market has given enough punishment to those who failed to hedge, but the pricing of hedging controllers is far from reflecting the valuation premium brought about by increased profit predictability.
When the “pit” of 54.7 billion exchange losses is backfilled, the released net profit space is superimposed on the volume and price support of high export prosperity, and a re-pricing for “certainty” has just begun.
