Leading shellfish specialist Zoneco Group (also known as Zhangzidao) is sliding further towards the financial danger zone, with the company now posting a worrying 89 percent debt-to-assets ratio.
The company had flagged a loss of between CNY 700 million (USD 110 million, EUR 91 million) and CNY 1.1 billion (USD 173 million, EUR 144 million) for the first quarter of 2018. In the end, profits fell 1,008 percent – by CNY 723 million (USD 113 million, EUR 94 million) – year-on-year in 2017 due to a wipe-out of a large swathe of the company’s mariculture.
Meanwhile, Zoneco’s auditor Da Hua Accountancy Co. has “reserved” its judgement rather than formally approve the company’s accounts for 2017.
Zoneco is already under pressure: Analyst Kang Jingdong at Xin Da Securities issued a “sell” on Zoneco stock, citing a CNY 1.5 billion (USD 236 million, EUR 197 million) loss in the company’s capitalization since the October 2017 wipe-out of its scallops.
The company has seen its share of price collapse in the past 12 months. The stock was trading on 18 April at CNY 4.02 (USD .63, EUR .52) and while that figure stood at CNY 4.12 (USD .64, EUR .54) on 30 April, the price is a long way off the CNY 11.31 (USD 1.78, EUR 1.48) seen in mid-April 2017.
