Global Bio-Chem Technology Group Co., (809) a Hong Kong-listed producer of biochemical products based on corn, said it expects to record a “substantial” drop in profit this year.
The company said falling prices for its products and the global economic slump will probably hurt sales this year, according to a statement to the Hong Kong stock exchange today.
Demand for Asian goods shrank this year amid the world’s deepest recession since the 1930s. Global Bio-Chem’s sales fell 29 percent in the first half of 2009 from a year earlier, as it reported a loss of HK$90.5 million ($12 million). Net income in the first half last year was HK$602 million.
The company’s shares have risen 49 percent in Hong Kong this year, compared with a 54 percent advance in the benchmark Hang Seng Index. The stock rose 5.1 percent to HK$1.85 today.
Global Sweeteners Holdings Ltd. (3889), a Hong Kong-listed producer of corn syrup, also issued a profit warning, saying earnings this year are likely to show an “observable decline” from 2008 because of weakened demand due to the financial crisis.
Demand and sales had picked up in the second half of the year, the company said in a statement today to the Hong Kong stock exchange. However, this would not offset the drop in the first half, it said.
Global Sweeteners’ shares have more than tripled in the past year.
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