On January 19, Capital Bank learned that Harbin Electric (code: 01133.HK), a Hong Kong-listed company, issued an annual performance forecast for the 2021 fiscal year. As of December 31, 2021, losses are expected to increase. Net profit attributable to shareholders of listed companies is -4.50 billion to -440 billion yuan. The company's industry is heavy electrical equipment.

The company made the above forecast based on the following reasons: (1) Affected by declining demand and rising raw material prices in the traditional power generation equipment industry, product prices fell and costs increased, leading to an increase in the company's current and pending execution of loss contracts, and a sharp decrease in gross profit compared to the previous year. (2) Overseas power plant engineering general contracting projects have caused large losses. First, the total cost of project execution is expected to rise sharply due to factors such as the rise in the price of project construction materials, the increase in labor costs and construction costs due to the novel coronavirus epidemic, and the increase in project postponement costs; second, general contract projects for overseas power plant projects are mostly settled in US dollars, and the continued appreciation of the RMB has led to a decline in the gross margin of the project. (3) The company deepened internal reforms, handed over retirees to social management, and calculated expenses outside the overall coordination of retirees on a one-time basis, which led to a year-on-year increase in management expenses in the current period.