Yurun stocks plunge on profitability warning

Shares of China Yurun Food Group (1068.HK) fell the most since it began trading on the Hong Kong Stock Exchange after the firm said it expects lower third-quarter profit, Bloomberg reported. The Nanjing-based company said that the drop is expected due to “continual publication of negative media reports” and higher raw material costs. Its stock fell 31% on the news. Yurun has lost over half its market value since a publication alleged on September 8 that some of its meat products contained an illegal additive. The industry as a whole also faces pressure from pork inflation, which rose 46% year-on-year in August. Yurun admitted that it faced “increasing difficulty in transferring the group’s increasd operation costs to its consumers,” adding that the effects could dampen profitability into the fourth quarter as well.