Earnings alerts paint grim picture for Hong Kong-listed firms
Signs of recovery on the mainland are yet to feed into improved fortunes for many HK-listed firms, especially in retail and manufacturing
Hong Kong-listed companies have issued almost 50 warnings over the past month about substantial profit declines or losses as the mainland economic recovery continues to look shaky.
Although the mainland's economy has shown signs of life, corporate earnings have not recorded a significant improvement in the first quarter of this year. Of the 1,558 listed companies on the main board and Growth Enterprise Market, 48 issued profit warnings in the month to May 14. This compares with 42 profit warnings issued for the same period last year.
The warnings have alerted investors that earnings are likely to be disappointing, with some expecting a pessimistic outlook for the rest of the year.
"The quarterly performance of listed companies has continued to get worse," said Castor Pang Wai-sun, head of research at brokerage firm Core Pacific-Yamaichi.
"Companies' operations have yet to see improvement in various industries, but some companies didn't report significant losses or profit declines when compared with the corresponding period last year after their business had started to deteriorate [in the last quarter of 2011]," Pang said.
The manufacturing and retailing sectors are particularly vulnerable to the economic weakness.