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China non-property companies under pressure through next year: Moody's

Xinhua, September 22, 2015 Adjust font size:

Chinese enterprises other than real estate sector will be under pressure through next year, with debts staying high, according to Moody's on Tuesday.

"Revenues will decline for most department store operators and food and beverage manufacturers in 2015, and stabilize in 2016," said Moody's Lina Choi, adding their debt will increase next year.

Moody's attributed the pressure partly to structural changes, such as the increased online competition.

Weak crude prices will suppress revenue growth for oil companies. Steel and cement manufacturers will suffer from losses in revenues by around 15 percent to 20 percent throughout 2015, and their earning power will be hurt by weak demand and price declines. Their debt levels will also rise in the coming year.

Construction companies, however, will see their revenue grow thanks to a heavy backlog of overseas and infrastructure projects.

China's auto companies will also grow, thanks to a moderate increase in domestic vehicle sales.

China maintained 7 percent GDP growth in the first half of the year, despite a feeble recovery in the world economy and turbulent global stock and foreign exchange markets. Endi