FILE PHOTO – The cityscape of the Beijing Central Business District, or Beijing CBD, is reflected in a pond during sunset, China October 17, 2018. REUTERS/Thomas Peter
January 31, 2019
SHANGHAI (Reuters) – Over 300 Chinese listed firms have said they will likely report full-year losses of over 100 million yuan each ($15 million), state media reported on Thursday, in a sign companies are facing increased pressure amid a slowing economy and trade frictions.
The Shanghai Securities News newspaper said that firms were making the disclosures to meet requirements set by China’s stock exchanges, adding that a large number were attributing their losses to asset writedowns or late payments from suppliers.
As of Wednesday, 320 firms said that they would post losses of over 100 million yuan each, 129 of which said their respective losses would exceed 800 million yuan, the newspaper said.
“We are finally getting some answers to when and how the ‘Sword of Damocles’ of 1.45 trillion yuan worth of goodwill impairments that hangs over the A-share market will happen,” the newspaper said.
The 79 companies that have warned of losses in the past three days include Kaidi Ecological, CPT Technolgoy and Huawen Media Group.
China’s crackdown on leverage and a bruising trade war with the United States have taken its toll on Chinese companies, which now face slowing profit growth and tough access to loans.
The country’s economy grew at its slowest pace in nearly three decades in 2018 and is expected to slow further before steadying around the middle of this year.
(Reporting by Brenda Goh and Samuel Shen; Editing by Shreejay Sinha)