China’s distressed asset manager Huarong announced a preliminary loss of RMB 4.6-5.0bn ($630-684mn) for the six months ended June 2023. This represents a ~73% decrease compared to its RMB 18.8bn ($2.58bn) loss in 1H 2022. The company said that it is focused on its strategic objective of “leading itself back on the right track within one year”, adding that it has enhanced its efforts on reforms and integration of non-financial subsidiaries. Huarong attributed the decrease in losses to:
- Increase in gains/losses from fair value changes of equity assets
- Revenue recognized from successful implementation of significant investments
- Recognition of credit impairment losses and unrealized losses from change in fair value of distressed debt assets ($3.10-3.18bn)
Huarong’s dollar bonds traded 1-3 points lower – its
4.25% 2027s fell 2.95 points to 73.05 to yield 12.71%.
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