Shanghai-listed HNA Infrastructure Investment Group [600515:CH], a subsidiary of debt-ridden Hainan Airlines Holdings (HNA) [600221:CH], announced that the company expected a net loss of between RMB950m and RMB1.25bn for the whole year of 2019, representing a decrease of 171.34% to 154.22% YoY, as reported by Yicai Global on April 23. This was lower than its earlier projection of a net profit of between RMB200m and RMB300m published in January, mainly attributable to the liquidity issues of its parent company, HNA.
HNA spent more than USD70bn buying global assets between 2015 and 2018, with major stakes in high-profile companies such as Hilton Worldwide Holdings [HLT:US] and Deutsche Bank [DB:US]. However, the company has been facing liquidity difficulties since mid-2018 and has been deferring bond payments and offloading its property assets to pay down its debts. In February, HNA announced to form a working committee with representatives from the Hainan provincial government and the China Development Bank (CDB) to manage its debt issues, as its financial conditions continued to worsen amid the COVID-19 outbreak. Affected by HNA’s underperformance, Haikou Meilan International Airport [0357:HK] and Sanya New Airport Investment Construction, both invested by HNA Infrastructure Investment, are also expected to revise down their 2019 earnings estimate, with a loss of around RMB390m.