SHANGHAI -- Chinese companies are ailing amid economic woes and the trade war, with roughly half reporting net profit declines or losses for the first six months of 2019.
Of 3,583 mainland-listed nonfinancial corporations, 46% saw profits shrink on the year or were in the red. Overall, they reported 2.5% less net profit than a year earlier.
At midtier automaker Lifan Industry (Group), Vice Chairman Chen Wei and President Ma Ke abruptly stepped down in late August. They were likely held responsible for the January-June net loss of more than 900 million yuan ($127 million). Sales came to 5.1 billion yuan.
Lifan sold just 22,000 vehicles over the period, a roughly 60% year-on-year decline, weighed down by new-model delays and unpopular electric cars. Chen and Ma had been in charge of electric and passenger car operations. The company now plans to return to its roots by focusing on two-wheeled vehicles.
New-auto sales in China are expected to fall a second straight year in 2019, dealing a blow to automakers and their suppliers. More than 70% of 174 industry players saw net profit decline or suffered net losses for the January-June half, according to data from Shanghai DZH. Small and midsize companies with limited resources were hit particularly hard, with net profit down 30% for the sector overall.
In the retail sector, supermarket and department store operator New Huadu Industrial Group logged a 120 million yuan net loss. The company had decided to shut down a third of its stores, deeming them unlikely to turn a profit.
The property market also points to an economic slowdown. Net profit among 132 real estate companies increased 17% on the year, slowing from the nearly 38% jump for the same period a year earlier.
Those outside the biggest cities are under more pressure. Yunnan Metropolitan Real Estate Development, affiliated with the local government there, reported a nearly 800 million yuan net loss.
Condo developers like China Vanke and Greenland Holdings are still doing well, but many are starting to hold back on new projects. Vanke Chairman Yu Liang has said that cash is king. The slowdown in property development has also rippled to home appliance makers, whose profit growth slowed to 10% in the first half from the year-earlier 22%.
Other Asian economies are affected as well. Net profit at South Korean companies plunged 42.8% for the half. "These were really difficult results," Samsung Electronics Vice President Lee Myung-jin said.
Taiwanese companies logged a 25.6% drop, with big names like Taiwan Semiconductor Manufacturing Co. slumping.
Certain Southeast Asian countries less reliant on exports performed well. Net profit rose 16.3% for Philippine companies, and 1.6% for Indonesian companies. But these countries' corporate sectors are not big enough to lift the region as a whole.