Profits of Hong Kong-listed firms at risk as US-China trade war rages
- More than two dozen Hong Kong-listed firms have issued profit warnings because of trade war effects since the end of June
- The tensions are affecting business sentiment and corporate investment, analysts say
Even as a new round of trade talks kicked off this week, the ongoing trade war between the United States and China is increasingly weighing on the bottom lines of both mainland and Hong Kong companies.
More than two dozen Hong Kong-listed firms have specifically cited the effects of tariffs on demand for their products or a weakening global macroeconomic outlook because of rising protectionism in issuing profit warnings since the end of June, according to regulatory filings.
Escalating trade tensions over the past year between the world’s two biggest economies have hurt sentiment and caused companies to curtail future investment, according to economists and investment analysts.
Now, companies from cosmetics retailer Bonjour Holdings to Singamas Container Holdings, the world’s second-largest maker of shipping containers, are warning the conflict is cutting into demand as consumers hold off on purchases and corporate customers rethink the size of future orders.
Bo Zhuang, chief China economist at research firm TS Lombard, said that the trade war has had a “mixed impact” on inventories, with Chinese tech firms having to hold large stockpiles and other industries drawing down their inventories, which could affect the results at Chinese firms.