Shanghai COVID curbs prompt half of U.S. firms to cut revenue forecasts

SHANGHAI (Reuters) – More than half of U.S. multinational companies in Shanghai have reduced their annual revenue projections due to the recent COVID-19 outbreak in the city, according to a survey by the American Chamber of Commerce in Shanghai published on Friday.

Responses to the survey, conducted with 167 companies, found 82% of manufacturers reported slowed or reduced prodction due to lack of employees, inability to obtain supplies, or government-ordered lockdowns.

More than half, or 54%, have cut 2022 revenue projections following the outbreak, though 38% said it was too early to estimate the impact.

The city of 26 million people has been battling its largest outbreak for nearly a month and this week put most of the city under lock down as cases continued to surge.

AmCham Shanghai said that only half of the respondents were satisfied with China’s pandemic efforts, and 77% had expressed disatisfaction with the length of quarantines.

The outbreak and subsequent curbs have disrupted life.

A growing number of local companies have also disclosed how the Shanghai lockdown is weighing on them, ranging from suspended operations and stagnant sales, to drying liquidity and delayed financial disclosures.

Shanghai-based power transmission equipment maker Sieyuan Electric Co said the pandemic has dirsupted operations, logistics and raw material supplies, impacting its first quarter and full-year performance.

East Money Information Co said it was highly uncertain if its annual shareholder meeting can be held at its Shanghai headquarters on April 8, and is suggesting shareholders participate online.

Shanghai Shizhong Intelligent Parking Corp said the lockdown has forced it to halt parking services, directly hitting performance.

Many places in China are affected by the outbreak, but “the situation in Shanghai is especially grave,” Shizhong said in a filing.

“The company’s sales and profit are directly impacted, as our clients.. are predominantly in Shanghai,” the company said, adding, the lockdown could also delay the its 2021 earnings release.