Shares of Lee & Man Chemical, a Hong Kong-based chemical company, plummeted in early trading following the company’s announcement of an expected sharp drop in first-half profit. This decline is attributed to the lower market prices of its major products.
Currently, shares are down by 14% at HK$4.08, leading to year-to-date losses of 37%. Lee & Man Chemical predicts an 88% year-on-year decrease in interim net profit due to weak market conditions impacting product prices. Additionally, the company anticipates declines in revenue and gross profit margin.
Lee & Man Chemical is involved in the manufacturing and sale of various chemical products such as chlorochemicals, fluorochemicals, and polymers.
Similarly, Lee & Man Paper Manufacturing, a company under the control of family members of Lee & Man Chemicals’ controlling shareholder, has also noticed financial strain. The company expects a 58% year-on-year decline in interim profit due to lower profit margins.
In early trading, Lee & Man Paper shares have fallen by 0.8% at HK$2.55.
Despite these challenges, Citi analysts have expressed optimism regarding Lee & Man Paper Manufacturing. In a research note published on Sunday, they provided a buy rating on the paper company and believe that profitability will improve during the second half of the year.