Some Chinese Shares Slide on Covid, Cost Concerns

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By Ronnie Harui

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Even as the benchmark index in Hong Kong rose Monday, shares of some Chinese companies across sectors listed on the exchange fell sharply after they warned of weak results for the first half of this year, mainly owing to the Covid-19 pandemic and higher operational costs .

Loaning Holdings Ltd. slid as much as 16% to HK$1.51, its lowest intraday level since November 2016, according to FactSet. Pharmaron Beijing Co. also lost as much as 16%, to HK$63.00, the lowest intraday level since June 14, while Smoore International Holdings Ltd. shed as much as 7% to HK$19.38, the lowest intraday level since June 20.

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Last Friday, Lonking Holdings said it expected first-half net profit to fally by between 84% and 92% from the same period a year earlier to between 75 million yuan ($11.1 million) and CNY150 million. Among the factors cited by the Chinese construction machinery manufacturer for the expected net-profit decline was the negative impact of Covid-19 on production and operating activities of the company’s Shanghai base.

Pharmaron Bejing, a research and development service provider for the life-sciences sector, said on Sunday that it expected first-half net profit to be flat to 8% higher from the same period a year earlier to CNY564.84 million to CNY610.02 million. Management attributed a further slowdown in its overall margin growth to factors such as increased overseas operating costs due to inflation pressure in Europe and the US

Meanwhile, Smoore International said last Friday that it expects first-half profit of between CNY1.32 billion and CNY1.55 billion, down 46.0% to 54.1% from the same period a year ago. The provider of tobacco-related vaping technology solutions attributed the likely decline to the fall in revenue from China’s domestic market. It said tightening pandemic prevention and control measures adopted in certain areas in Shenzhen significantly affected production operation in the first quarter.

The Hang Seng Index was last up 2.4% at 20792.63.

Write to Ronnie Harui at [email protected]

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Credit: www.marketwatch.com /

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