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Profit warnings issued by hundreds of Chinese companies
2019/02/02 08:03:17
China's News, China Financial News, Gaming,Tech, Tencent

Feb 02, 2019 (China Knowledge) - More than 280 Chinese companies revised their earnings outlooks estimates for 2018 as they gave preliminary announcements. The companies covered all industrials from airlines to small-scale household goods suppliers.

With Wednesday’s disclosures and according to Bloomberg's analysis of the data, more than 370 of the 2,400 Chinese companies warned of a loss for last year. About 86% of these companies were profitable the year before. 59 firms revised down their earnings by more than 66 per cent.

These companies cited China’s economic slowdown, along with changes in the accounting system as the reason for earnings revision.

"Private companies are particularly vulnerable to the economic downturn. The deleveraging campaign and the deterioration of their corporate health are normal for an economy that is shifting gears and slowing down,” said Lv Changshun, a money manager at Beijing Dajun Zhimeng Investment Management Co.

Mr Yu Dingheng, a fund manager at Shenzhen Flying Tiger Investment & Management Ltd, explained that “We’re only just seeing the beginning of deterioration in corporate earnings as the economy slows further,” “Things will continue to go downhill for firms seeing business slowing and even as the macro-economy recovers, these individual firms will never be what they were.”

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