Chinese seafood firms debt loads remain high

A study of stock market filings by SeafoodSource has revealed worryingly high levels of debt among several of China’s leading seafood firms, many of whom have been on acquisition drives in recent years. 

One of China’s leading seafood firms, Zoneco Group Co., is carrying debt of 75 percent of assets. The company reported debts of CNY 3.4 billion (USD 512.6 million, EUR 440 million), on assets of CNY 4.62 billion (USD 696.6 million, EUR 596.9 million), in the first half of 2017. 

Leading shrimp exporter Guolian Aquatic, meanwhile, has a healthier but still significant debt load of CNY 1.43 billion (USD 215.5 million, EUR 185 million), against assets of CNY 3.33 billion (USD 502 million, EUR 430.8 million). 

Also carrying a heavy debt load: catch fisheries leader Kaichuang Marine, with CNY 900 million (USD 135.7 million, EUR 116.4 million) in debt, versus assets of CNY 1.7 billion (USD 256 million, EUR 219 million). Another major trawler operator, CNFC Overseas Fisheries, is reporting debt of CNY 550 million (USD 82.9 million, EUR 71.1 million) on assets of CNY 1.21 billion (USD 182.4 million, EUR 156.6 million) – a debt load of 45 percent. Processor and salmon producer Oriental Ocean is somewhat healthier, with debt of CNY 1.08 billion (USD 162 million, EUR 139.7 million) against assets of CNY 4.06 billion (USD 612.1 million, EUR 525.4 million). 

High debt in the corporate sector is a worry across China’s economy, though private firms making plays in frothy sectors like real estate seem more at risk than state-owned firms with access to an implicit government bailout.

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