Chinese listed companies have reported a sharp rise in unpaid bills during the third quarter, in one of the clearest signs yet of the toll that China’s economic slowdown is taking on corporate balance sheets. A Financial Times analysis revealed that 66 per cent of listed Chinese companies that have reported third-quarter results showed a year-on-year increase in such unpaid bills – called accounts receivable in accounting – as a proportion of sales, according to the S&P Capital IQ database.
The hardest hit companies are those linked to the construction and infrastructure sectors, including machinery makers, steel mills, coal and cement companies. For example Sany Heavy, the world’s ninth-largest machinery maker by sales, reported that accounts receivables were up 83 per cent year to date at the end of the third quarter, hitting Rmb21bn. At Zoomlion, a leading Chinese machinery maker, accounts receivable at the end of the third quarter were up 69 per cent from the beginning of the year, according to earnings released on Tuesday.
Source: Financial Times