As technological innovation becomes the core driving force for promoting high-quality economic development, A-share listed companies continue to attach greater importance to R&D investment.

According to data from the China Association for Public Companies, as of September 1, a total of 5,340 A-share listed companies had disclosed their R&D investment for the first half of 2024, totaling approximately RMB 750 billion, representing a year-on-year increase of 1.3%, maintaining growth for consecutive years.

Analysts indicate that many listed companies are investing more in R&D to achieve business transformation, increase product technological content, and enhance their core competitiveness.

Industrial sector R&D investment exceeds RMB 200 billion in the first half

In terms of R&D scale, the industrial, information technology, and discretionary consumption sectors rank among the top in R&D expenses, each exceeding RMB 100 billion. Specifically, the industrial sector incurred R&D expenses of up to RMB 206.11 billion, followed by information technology (RMB 192.73 billion), discretionary consumption (RMB 105.45 billion), materials (RMB 86.94 billion), and healthcare (RMB 57.76 billion).

Regarding R&D intensity (the proportion of R&D expenses to revenue), the financial industry leads with an R&D intensity of 8.31%, followed by the information technology, healthcare, discretionary consumption, and industrial sectors, with R&D intensities of 6.45%, 4.79%, 3.40%, and 2.21%, respectively.

If we categorize by sectors, the STAR Market, a hub for "hard technology," boasts the highest R&D intensity at 11%.

BYD leads in R&D investment, followed closely by China Mobile and others

In terms of R&D investment amounts, 1,161 listed companies had R&D investments exceeding RMB 100 million in the first half of 2024, 107 companies exceeded RMB 1 billion, and 4 exceeded RMB 10 billion. Among them, BYD topped the list with R&D investment of RMB 20.177 billion, followed by China State Construction Engineering and China Mobile, with R&D investments of RMB 17.495 billion and RMB 14.001 billion, respectively. Additionally, ZTE's R&D investment also exceeded RMB 10 billion, reaching RMB 13.429 billion, ranking fourth. China Communications Construction ranks fifth with R&D investment of RMB 9.905 billion in the first half of the year.

In the first half of this year, BYD (002594.SZ) achieved a record-high R&D investment of RMB 20.177 billion, marking a 41.64% year-on-year increase and surpassing the company's current-period net profit of RMB 14.113 billion. BYD stated that in the new energy vehicle sector, the company is deeply invested in core technologies, accelerating the launch of a series of globally leading and disruptive technologies, gradually forming a unique core competitiveness from electrification to intelligence.

Meanwhile, China Mobile's (600941.SH) R&D investment exceeded RMB 14 billion, a year-on-year increase of 46.42%. The company is vigorously promoting investments in strategic emerging industries and future industries such as artificial intelligence, space-terrestrial integrated networks, basic software, and advanced manufacturing, accelerating the coordinated development of production and investment. It also continuously strengthens the integration and innovation of industry-university-research collaboration in partnership with leading enterprises, universities, and research institutes.

Notably, state-owned enterprises continue to carry the banner of R&D, with 8 state-controlled enterprises among the top 10, including 7 enterprises with names starting with "Zhong" ( center ). Among private enterprises, BYD and Contemporary Amperex Technology (CATL, 300750.SZ), two new energy giants, rank among the top in R&D investment.

In terms of R&D intensity, leading listed companies are concentrated in industries such as computers, pharmaceuticals and biology, electronics, and national defense and military. The top 100 companies have a total R&D investment exceeding RMB 21 billion, accounting for 65% of their operating revenue. Unfortunately, the revenue scale of these companies is generally low, with less than half of the top 100 achieving revenue exceeding RMB 1 billion.

When considering both R&D investment scale and R&D intensity, 11 listed companies have R&D investments exceeding RMB 1 billion and R&D investments accounting for more than 20% of revenue, including ZTE, BeiGene, Hengrui Medicine, iFLYTEK, and BluePark New Energy Automotive.

The China Association for Public Companies stated that strategic emerging industries, high-tech manufacturing, as well as industries such as computers, electronics, and machinery equipment, have demonstrated vigorous innovation vitality, with R&D intensities exceeding 5%. More than 900 enterprises have R&D intensities exceeding 10%.

Across the capital market, listed companies have emerged as the main force driving technological innovation. Over the past five years, listed companies have cumulatively invested RMB 6.4 trillion in R&D, with an average annual growth rate of nearly 20%. R&D investment accounts for half of the country's total enterprise R&D expenditure, and the number of patents accounts for one-third of the country's total patents. The R&D intensities of the STAR Market and the ChiNext reach 10.9% and 4.9%, respectively.

Analysts suggest that against the backdrop of developing new types of productivity, significant opportunities exist in future technologies, pharmaceuticals, and security. Therefore, technology innovation-driven industries represent the clearest and most favorable track.

In its research report, China International Capital Corporation Limited (CICC) noted that technological innovation is an inherent requirement for China's high-quality development. Only by continuously strengthening technological innovation can China enhance its irreplaceability within industrial chains and ensure the security of the entire industrial chain. Amid increasingly fierce global technological competition, future technological progress will increasingly rely on independent research and development and innovation. Chinese enterprises should continuously strengthen technological innovation in cutting-edge fields to continuously enhance their core competitiveness.