Bad management adds to woes of some A-share firms

Updated 2018-02-01 15:13:01 China Daily

A group of A-share listed Chinese companies have announced or are about to disclose significant losses for 2017, as they have experienced various problems related to bad management and ecological issues.

Founded in 1958, Dalian-based Zoneco Group Co Ltd, one of China's largest seafood suppliers, is expecting to report an annual loss between 530 million yuan (.20 million) and 720 million yuan, according to the company's notice released on Tuesday.

Zoneco went public in 2006, and the significant loss last year has brought its profits made in the past 12 years to zero. The company said it would suspend the trading of its stocks on Wednesday, and resume trading no later than Monday.

In its previous announcement for the first three quarters of 2017, Zoneco showed that the net profit attributable to shareholders was expected to reach 90 million yuan to 110 million yuan, an increase of 13.07 to 38.2 percent year-on-year.

The amount of scallops growing in the sea is abnormal in some areas, which might affect the value of inventories, and result in a loss for the full year, according to Zoneco's statement.

"Agricultural production companies usually lack financing channels, and raising funds from the secondary market could be an example of the capital market supporting the real economy," said Fei Xue, an opinion writer with the Beijing News.

"But for Zoneco, a company that relies on biological assets, it's difficult to check the problems in the deep sea."

Leshi Internet Information & Technology Corp, the listed arm of Chinese internet conglomerate LeEco, expects a loss of 11.6 billion yuan for last year. The company went public in 2010 and has made profits for seven consecutive years. The loss in 2017 has exceeded the accumulated profits in the past years.

Meanwhile, Shanghai-listed Sinopec Oilfield Service saw its shares tumble 8.93 percent on Wednesday, closing at 2.65 yuan. The company expects a loss of 10.6 billion yuan for last year. This will be the second consecutive year of losses for the group.

Hubei Yihua Chemical, another company in the petroleum manufacturing sector, expects to report a loss of 4.4 billion-4.8 billion yuan in 2017, which is higher than the total market value of the company, which is 3.9 billion yuan.

Protruly Vision Technology Group, a Shenzhen-based high-tech enterprise that provides advanced electronic vision solutions, products and services, said it expects a significant loss in 2017, though the detailed amount is not confirmed yet.

Reports indicate the main reason behind its loss is that the original controlling shareholder and the real controller of the company are suspected of encroachment of the company's interests.

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