Profitability

Fortune China’s 2025 China 500 list reveals State Grid as the revenue leader at $548.4 billion, followed by PetroChina and Sinopec. ICBC is the most profitable. The top ten most profitable include TSMC, Tencent, Alibaba, and Ping An. Tencent’s net profit surged over 65% in 2024. These ten companies accounted for 41% of the total profits of all listed companies.

China’s automotive market is witnessing public spats between executives amid intense competition. Analysts suggest this shift reflects unsustainable price wars and squeezed margins. Car manufacturers are publicly criticizing rivals to shape perception, protect brand image, and maintain consumer interest. An industry expert underscores the importance of maintaining at least 20% gross profit margins for ethical and long-term business viability, crucial in the current cutthroat environment.

111, Inc. reported Q1 2025 results, highlighting maintained quarterly operational profitability and positive cash flow. Net revenues remained flat at RMB3.5 billion, while operating expenses saw a 4.8% decrease, and operating expenses as a percentage of revenues decreased by 30 basis points YoY.

Xiaomi CEO Lei Jun stated the company will avoid a price war, focusing on sustainable growth in the automotive sector. Xiaomi aims for a long-term hardware profit margin capped at 5% and plans to produce its own automotive chips. The YU7 standard edition pricing will be decided just before launch. The company projects its automotive, chip, and other new ventures will achieve profitability in Q3 or Q4, supported by strong Q1 performance and significant investment in intelligent driving system R&D.

Agora Inc. (API) reported a second consecutive quarter of GAAP profitability, achieving a net income of $0.4 million in Q1 2025. While overall revenue grew slightly to $33.3 million, the Agora segment saw a 17.7% increase. The company maintains a strong cash position of $388 million. For Q2 2025, Agora projects revenue between $33-35 million.