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Alarm bells are ringing in China as Beijing continues its relentless crackdown on shadow banking.
Hundreds of Chinese companies issued profit warnings, telling their investors that earnings for the full year were going to be below expectations, according to Bloomberg. No less than 440 zombie companies disclosed the bad news on Wednesday, still one day before the deadline for such disclosures. The companies cited the country's economic slowdown (which is also catalyzing sales of Chinese-held U.S. real estate), as well as recent accounting changes that followed a $2.3 trillion equity market selloff last year.
The change is stunning: out of more than 2400 mainland listed companies, 373 have said they're going to post a loss - and what's more concerning, 86% of those companies were profitable in 2017.
By Tyler Durden
Thur 1/31/2019
