More than 40% of Chinese listed companies are expecting worse results24 May, 2012, 14:03. Posted by Zarathustra
By now we have already known that Chinese companies are doing amazingly badly despite the amazingly “good” GDP growth. Now we learn that the worst is not over at all.
Caijing is reporting that out of 848 listed companies in Shanghai and Shenzhen which have provided forecast for the first half of the year, 349 or 41.16% of those companies are expecting less earnings or losses. Out of these companies, 67 companies are expecting their first loss, and 58 companies are expecting their already-money-losing businesses to continue to make losses.
Without going into specific companies, real estate companies are among those which are expecting things to get worse, with 66.67% of real estate companies which have already provided guidance expecting worse second quarter. The next worst sector was manufacturing, with 52 of the 628 companies expecting to lose money for the first time, and 33 to continue to lose money. Out of all 628 companies already provided guidance, 48.09% of these companies are expecting worse second quarter.
We have already seen that consensus is still expecting earnings of Chinese companies to grow in 2012. This is just yet another sober reminder that this is not going to happen, and the consensus is probably still overly optimistic about the prospect of Chinese growth.
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