You thought 2018 was bad for China’s stock market? Profit warnings suggest worse may be yet to come

Last year was a dreadful one for mainland Chinese equities as a slowdown in economic growth and the trade war with the US combined to crush market sentiment. The bad news for investors is that the worst may be yet to come. Preliminary announcements showed that 390 companies listed on China’s bourses are set to report a combined loss to the tune of 330 billion yuan (US$49 billion) for 2018. That means the total loss for the country’s listed firms is on track to be three times greater than a…

Read More

More Chinese companies scramble to issue profit warnings as debris field from M&A boom begins to surface

Hundreds of Chinese companies have revised their earnings outlook for 2018 before a deadline late Thursday, warning that results will fail to meet expectations as economic growth eases, forcing heavy write-downs. Of 2,488 companies that made preliminary announcements, more than 280 revised their estimates, while 59 warned earnings would be down by more than 66 per cent from their previous estimates. Among those warning of the sharp downward revision, 42 cited impairment of goodwill as a factor. Goodwill is an accounting term referring to an intangible asset class arising from…

Read More