Slowing economy drags down corporate profits

Nearly half of the 1,462 companies listed on the Shenzhen Stock Exchange (SZSE) expect to see profit declines or losses according to their third-quarter profit forecasts, the China Securities Journal reported Tuesday.

As of Monday, 709 listed enterprises expect to see profit drops or losses in their January-September results, accounting for 48.5 percent of the 1,462 companies that have released the forecasts so far, data from the SZSE's website show.

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

Business insiders attributed the lackluster forecasts to the flagging momentum of economic growth and weakening demand. The metal, chemical, machinery and electronic information industries bore the major brunt, said the report.

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

China's economy slowed to 7.6 percent 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.