Bleak forecasts from China- related stocks
Published January 28, 2006
Business Times
Bumper crop of profit warnings issued to SGX ahead of CNY holidays
CHINA-RELATED stocks are issuing a bumper crop of profit warnings - as seen by the number of statements issued to the Singapore Exchange (SGX) yesterday, just before the Chinese New Year holidays kick in.
China-based Zhongguo Jilong Ltd warned that its performance for the fourth quarter ended Dec 31, 2005 will decline vis-a-vis the third quarter ended Sept 30, 2005 and fourth quarter ended Dec 31, 2004. This is due to the underperformance of certain subsidiaries in China.
Similarly, China Food Industries placed investors on alert for 'substantially lower' earnings for the fiscal year 2005 compared with 2004. It attributes the weaker preformance to falling pig prices and import suspension imposed by the Agri-Food and Veterinary Authority of Singapore which affected its meat processing and food distribution segments.
Another company, New Lakeside Holdings Ltd, which has reported a loss of 66.17 million yuan (S$13.3 million) H1 2005, is now warning of further losses of about 10 million yuan in H2 2005 due to higher cost of production as a result of raw material shortage. The fall in apple supply due to poor weather conditions, it said, has seen annual total supply of apples in China fall by about 35 per cent.
Also sounding the alarm, Sinobest Technology Holdings Ltd said that its net profit for the year ended Dec 31, 2005 is expected to be lower than the previous year due to intense competition and slower progress made in some of its projects.
However, the group expects to remain profitable. The group intends to continue focusing on securing more software development and technical services projects to improve profit margin, to raise efficiency, and reduce cost.
Continuing in the same bleak tone, Fu Yu Corporation Ltd said its full-year results for 2005 are expected to be dented by provisions for obsolete stocks and doubtful debts of around $14 million. The provisions were made following a preliminary assessment of the financial results of its subsidiaries in China. However, the group expects to remain profitable for the full year.
Completing the downbeat note is Metal Component Engineering's profit warning on its H2 2005 results. Although the group's H2 2005 results turnover had improved over H1 2005, the company said its results before tax are expected to be a loss.
It attributes the weaker results to lower-than-forecast orders from major customers in China, initial investment and overhead cost incurred in the newly acquired plant in Thailand, and the setting-up of a new plant in Qingpu, China, and the loss from the disposal of its subsidiary, MCE Seimitsu Indonesia. The net loss from the disposal is about $0.3 million.
Business Times
Bumper crop of profit warnings issued to SGX ahead of CNY holidays
CHINA-RELATED stocks are issuing a bumper crop of profit warnings - as seen by the number of statements issued to the Singapore Exchange (SGX) yesterday, just before the Chinese New Year holidays kick in.
China-based Zhongguo Jilong Ltd warned that its performance for the fourth quarter ended Dec 31, 2005 will decline vis-a-vis the third quarter ended Sept 30, 2005 and fourth quarter ended Dec 31, 2004. This is due to the underperformance of certain subsidiaries in China.
Similarly, China Food Industries placed investors on alert for 'substantially lower' earnings for the fiscal year 2005 compared with 2004. It attributes the weaker preformance to falling pig prices and import suspension imposed by the Agri-Food and Veterinary Authority of Singapore which affected its meat processing and food distribution segments.
Another company, New Lakeside Holdings Ltd, which has reported a loss of 66.17 million yuan (S$13.3 million) H1 2005, is now warning of further losses of about 10 million yuan in H2 2005 due to higher cost of production as a result of raw material shortage. The fall in apple supply due to poor weather conditions, it said, has seen annual total supply of apples in China fall by about 35 per cent.
Also sounding the alarm, Sinobest Technology Holdings Ltd said that its net profit for the year ended Dec 31, 2005 is expected to be lower than the previous year due to intense competition and slower progress made in some of its projects.
However, the group expects to remain profitable. The group intends to continue focusing on securing more software development and technical services projects to improve profit margin, to raise efficiency, and reduce cost.
Continuing in the same bleak tone, Fu Yu Corporation Ltd said its full-year results for 2005 are expected to be dented by provisions for obsolete stocks and doubtful debts of around $14 million. The provisions were made following a preliminary assessment of the financial results of its subsidiaries in China. However, the group expects to remain profitable for the full year.
Completing the downbeat note is Metal Component Engineering's profit warning on its H2 2005 results. Although the group's H2 2005 results turnover had improved over H1 2005, the company said its results before tax are expected to be a loss.
It attributes the weaker results to lower-than-forecast orders from major customers in China, initial investment and overhead cost incurred in the newly acquired plant in Thailand, and the setting-up of a new plant in Qingpu, China, and the loss from the disposal of its subsidiary, MCE Seimitsu Indonesia. The net loss from the disposal is about $0.3 million.
posted by SmartYInvestor at 10:35 AM
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