HONG KONG Nov 21 Shares of Chinese smartphone
maker Coolpad Group Ltd slid to a four-year low on
Monday after the company flagged a drop in full-year profit amid
stiff competition, the latest part of the LeEco empire to come
Coolpad's warning came just weeks after Chinese conglomerate
LeEco, which has invested in high-tech products from electric
cars to smartphones, said it was grappling with a shortage of
cash and suffering from expanding too fast.
LeEco's billionaire founder and chief executive, Jia
Yueting, said in a letter sent to Reuters that the firm was
facing "big company disease" after having expanded at an
Shares of Coolpad, which has a market value of HK$5 billion
($645 million), plunged as much as 12 percent to HK$0.90, their
lowest since October 2012, lagging a flat overall market.
The smartphone maker has faced difficulties competing in an
increasingly saturated smartphone market in China with the likes
of Samsung Electronics, Apple Inc, Lenovo
, Xiaomi, Oppo, Vivo and Huawei Technologies.
In a statement to the Hong Kong stock exchange late on
Friday, Coolpad said it expected a loss of HK$3 billion for the
full year 2016, a sharp drop from the HK$2.3 billion profit it
posted in 2015.
The company said its performance was hit by a downturn and
fierce competition in the domestic smartphone market, and it was
focusing on clearing inventories.
The news comes amid concerns that the cash-strapped group
could run into a crisis or abandon its electric car ambitions -
a project which has already cost it 10 billion yuan ($1.5
billion) in development, according to Jia himself.
Leshi Holdings said earlier this month that it had secured
commitments for $600 million to support its automotive unit and
LeEco high-tech business.
($1 = 7.7564 Hong Kong dollars)
(Reporting By Donny Kwok and Jess Yu; Editing by Subhranshu