BEIREN Printing Machinery Holdings' profit slide is more a result of China's austerity programme than accounting discrepancies, say analysts. 'The company is using an excuse to hide the decrease in profits,' said Patricia Lambert, head of China research at W I Carr. The mainland printing press manufacturer has slashed 32 per cent from its 1994 earnings forecast to 85 million yuan (about HK$77.52 million), down from the 125 million yuan forecast in its interim report in August. The forecasts had been based on mainland accounting practices. What concerns analysts is whether there have been significant changes in China's operating environment that have battered Beiren's performance over the past four months. Beiren posted profit of 55.5 million yuan in the first six months of the year. The revised projection implies that the company will make a profit of 29.5 million in the second half. The company attributed the markdown mainly to the difference in accounting standards between Hong Kong and China, although it also referred to China's macroeconomic control measures and an unfavourable market environment. Analysts admitted that both the austerity programme and accounting differences had a bearing on Beiren's performance but disputed the extent of the impact. A source close to Beiren said the accounting discrepancies would contribute less than a five per cent difference to Beiren's full-year profits. If an enterprise had serious triangular debt problems, the difference in profits caused by accounting discrepancies would be larger because Hong Kong and mainland accounting standards required different levels of provisions for bad debts. Another mainland company likely to follow the same path as Beiren is Kunming Machine Tool Co, which reported plunging interim turnover because of increased inventory.