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Over 200 of China's most promising tech companies listed on China's Science and Technology Innovation Board (STAR), often regarded as China's version of the NASDAQ, saw major growth in net profits in 2020, jumping nearly 60 percent for the year, even as the COVID-19 pandemic wreaked havoc on economies across the globe, according to official data released on Monday.

In 2020, total revenue for all the 232 companies listed on the STAR market rose by 15.56 percent year-on-year, to around 331.5 billion yuan ($51.28 billion), while year-on-year net profit grew by 59.92 percent to 46.2 billion yuan, according to data from the Shanghai Stock Exchange.

About 70 percent of listed companies saw a growth in net profit with biotech companies taking the lead. Sansure Biotech Inc, a leading supplier of COVID-19 sample collection kits, saw a 65-fold increase in profits. Another COVID-19 test kits supplier, Zhejiang Orient Gene Biotech Co. also saw a 20-fold growth in net profits.

Also seeing major growth in profits are companies in areas such as integrated circuit, photovoltaic and in-vitro diagnostics. The 26 integrated circuit firms listed on the STAR market registered a 154 percent growth in profit, while the five in-vitro diagnostic companies also saw significant rise in profit for the year.

The performance of the companies listed on the STAR market mirrored the overall trend in the world's second largest economy, which was hit hard by COVID-19 epidemic, but quickly rebounded due to massive demand for medical supplies and other China-made products overseas. This surge in global demand helped to lift the Chinese economy, which achieved a 2.3-percent growth in 2020, the only major economy in the world to record growth.

However, even as high-tech companies reached solid profits in 2020, other sectors encountered major headwinds last year due to the pandemic. 

In stark contrast to the impressive performance of companies on the STAR market, Chinese hot pot chain, Haidilao, said on Monday that net profits were expected to drop by 90 percent in 2020. This is a clear sign of the severe impact the COVID-19 pandemic inflicted to the country's food and drinks sector, as many businesses were shut down due to the spread of the virus.

Help revive those businesses that are still facing difficulties and boost China's technological capabilities are front and center on the agenda for the upcoming two sessions, the most important annual political event in China that sets top development goals.

The annual session of the National People's Congress (NPC) and the National Committee of the Chinese People's Political Consultative Conference (CPPCC), the top political advisory body, are set to kick off on Thursday.

Through various recent meetings and policy documents, Chinese policymakers have made clear that, to further consolidate the economic recovery and bolster technological prowess in core areas such as chips and biotech, are top priorities.

Analysts said that the support from legislators during the two sessions will further speed up economic recovery and boost the tech sector.

Global Times