China's listed firms make optimistic Q1 forecast

Of China's listed firms, 391 expect their performance to improve in the first quarter of this year, representing over half of companies that have released preliminary reports.

Of the companies, 312 forecast their profits to increase, 40 said profits will increase for two straight years, and 39 expect they will stop losses, data from Wind Info showed.

As of Tuesday, 674 firms listed on the country's A-share market had filed Jan.-March preliminary reports with the Shanghai and Shenzhen stock exchanges.

By sector, 77.27 percent of companies from the automobile industry expect better performance, as the country has boosted promotion of new energy vehicles. Companies that produce construction material were also looking up as they benefit from China's national urbanization progress.

Over half of listed firms from the telecom, home appliance, media and medicine sectors were optimistic about the first quarter, while those engaged in real estate and agriculture business mainly expect shrinking profits or losses.

Wu Zhaoyin, analyst with Essence Securities, said the listed companies still face the risk of falling profitability, as the country's feeble economic indicators in the first two months have weighed on basic industries, the property market and financial businesses.

Financial institutions projected a slowdown in the country's economic growth in the first quarter amid increasing downward pressures.