The number of Chinese companies that have issued warnings on earnings is turning into a flood.
On Wednesday, 440 firms said that last year’s financial results had deteriorated. In total, about 373 have said that they would post a loss out of the more than 2,400 listed firms that have announced preliminary numbers or issued guidance this season, data compiled by Bloomberg show. About 86 percent of those incurring losses were profitable in 2017.
Damage has been widespread: airlines faced soaring fuel costs and a weak yuan, the equity-market slump hurt brokerages, while China’s economic slowdown and surge in impairment costs slashed earnings for a bus manufacturer, a maker of refrigerators and an ID card supplier. Another glut of forecast cuts was likely before the end of yesterday, as many firms opt to take a hit from more stringent accounting rules rather than report years of losses.
“We’re only just seeing the beginning of deterioration in corporate earnings as the economy slows further,” said Yu Dingheng (餘定恆), a fund manager at Shenzhen Flying Tiger Investment & Management Ltd (深圳市翼虎投?管理). “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.”
Joining the growing list of firms on Wednesday expecting numbers for last year to decline from a year earlier were Lens Technology Co (藍思科技), developer Oceanwide Holdings Co (泛海控股), chemicals producer CEFC Anhui International Holding Co (安徽華信) and China Southern Airlines Co (中國南方航空). Shares of all four companies fell onshore yesterday.
Some Chinese firms said that last year’s results would be far better than expected, including Jiangxi Copper Co (江西銅業), WuXi AppTec Co (藥明康德) and Guangzhou Baiyunshan Pharmaceutical Holdings Co (廣州白雲山醫藥). However, only miner Jiangxi Copper rose yesterday.
China’s equity traders fled stocks in Shenzhen again yesterday, sending the city’s benchmark down for a fifth day. They have sought refuge in shares of state-controlled giants instead, betting that they are better-placed to benefit from the Chinese government’s efforts to support the economy. Shenzhen’s stock exchange is home to most of China’s start-ups and private companies.
For those looking for shelter from the flurry of profit cuts, analysts at Citigroup Inc recommended a handful of Chinese property stocks. Even if the nation’s economy strengthens, the outlook for some of the companies that have flagged a slump in earnings is unlikely to improve, Yu said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained