China Huarong Asset Management expects to post a net loss of RMB 27.6 billion ($4 billion) for 2022, two years after a record loss prompted the Chinese government to bail out the group, reports the South China Morning Post.
The bad-loan manager said capital-market volatility eroded the fair values of certain equity financial assets, resulting in “significant unrealised losses.” It also said that a slump in the property market forced it to set aside money for losses in the value of its assets.
The profit warning, in a filing with the Hong Kong stock exchange on Sunday, came after Huarong said on Friday it was fined RMB 100,000 by China’s Ministry of Finance, which found the company’s internal risk controls ineffective and its accounting data “severely distorted.” Seven Huarong subsidiaries also received fines of the same amount.