Many businesses are currently putting together estimates of their 2008 performance. Few are optimistic about the exercise, and some are reporting there may be as much as a 50 percent net profit decline during 2008.
Due to the high coal price in 2008, power companies generally delivered bad results. Huaneng Power International Inc. (600011) expects to record a loss for 2008.
Anhui Jianghuai Automobile (600418) predicts that net profits in 2008 will drop by more than 50 percent. Increases in raw materials prices and labor costs have resulted in higher production costs than the previous year, while sales have declined, leading to a hit on net profits.
Xining Special Steel (600117) is also predicting a loss for 2008. Their report states that maintaining daily output in winter has led to high inventory costs resulting in a loss during this season. Again, a substantial decline on sales prices has badly affected 2008 performance.
Furthermore, ST Kejian (000035) is estimating a 10 million yuan loss for 2008. Compared to the 120 million yuan net profit in 2007, ST Kejian encountered about an 8 percent loss.
For more details, please read the complete Chinese story here at:
http://paper.cs.com.cn/html/2009-01/19/content_19871893.htm
(China.org.cn January 19, 2009)
