Haike Chemical plummets after profit warning on China macro jitters

In a trading update ahead of its first-half results, Haike said it expects to report a profit for the period of CNY95,000, versus a loss of CNY361,000 in the first half of last year as total turnover decreased by 16.2% to CNY385.4m on the back of price reductions.

However, Haike, which produces propylene glycol, cosmetic additives and other chemical products, said that as a result of a deteriorating operating environment in China the second half of the year has seen downward pressure on revenues and margins for its principal products, in particular DiMethyl Carbonate and Isopropyl Alcohol.

As a result, the group said it reckoned it is at risk of not achieving a profit for 2015.

“China's difficult macro-economic conditions have made trading challenging for many specialty chemicals businesses in the country. The group experienced a deterioration of performance in July and August, with both these months recording a loss,” it said.

Haike said it continues to focus on cost control and product mix improvement, and is considering options to counteract recent economic and market developments in order to optimise performance.

At 1136 BST, shares were down 40% at 7.75p.