'Slowing economy likely to drag down China corporate profits'

48.5% of companies on Shenzhen Stock Exchange expect to see drop in profits, losses in Jan-Sept results

Nearly half of the 1,462 companies listed on one of China's main bourses, Shenzhen Stock Exchange (SZSE), are expecting to see a drop in profits or losses in the first three quarters of the current year due to the impact of the economic slowdown, according to a media report today.

As of yesterday, 709 enterprises listed on the SZSE said they expect to see profit drops or losses in their January-September results, accounting for 48.5% of the 1,462 companies that have released the forecasts so far, the business daily 'China Securities Journal' reported.

Meanwhile, the net profits of 1,213 companies with comparable figures are expected to reach 112.29 billion yuan ($17.79 billion) for the first three quarters, down 11.9% year on year, according to the forecasts, the report said.

Business insiders attributed the lacklustre forecasts to the flagging momentum of economic growth and weakening demand.

The metal, chemical, machinery and electronic information industries bore the major brunt, it said.

Shanxi Guanlv Co said it might see losses of up to 280 million yuan in the first three quarters as a result of falling aluminium prices, rising electric power costs and weakening market demand, according to its third-quarter profit forecast.

China's economy slowed to 7.6% in the second quarter, marking the slowest pace of growth in more than three years.

The nation's statistical authority is scheduled to issue an update on the third-quarter GDP growth on Thursday.