Shares in China's ZTE slump after company releases Q3 profit warning
AFPHONG KONG -- Shares in Chinese telecom firm ZTE, accused by U.S. lawmakers of posing a security threat, tumbled 15.9 percent in Hong Kong on Monday after it released a third-quarter profit warning.
October 16, 2012, 3:21 pm TWN
The stock closed at HK$10.56 a day after it projected a net loss between 1.9 billion yuan (US$303 million) and 2 billion yuan for the three months to Sept. 30, while the benchmark Hang Seng Index ended flat.
Operating revenue fell 13 percent in the same time period due to the “effect of delayed progress on certain international projects,” ZTE said in a filing to the Hong Kong stock exchange late Sunday.
In Shenzhen, where ZTE is also listed, the stock closed down 10 percent, its daily limit, at 9.45 yuan (US$1.50).
“We see ZTE's disappointing (third-quarter) performance as not solely due to company-specific issues,” British bank Barclays said in a report, according to Dow Jones Newswires.
The bank said it believed the poor network operating environment would also apply to other Chinese companies in the sector, warning that the “worse may not be over yet.”