(Yicai) Aug. 7 -- Thirty-eight Chinese real estate companies, almost one third of those listed on the Shanghai and Shenzhen stock exchanges, are predicting they will run up combined losses of as much as CNY17 billion (USD2.3 billion) in the first six months as a subdued property market squeezes their profit margins and keeps sales slow.

Thirty-eight out of the 116 developers listed on the mainland predict losses of between CNY12 billion (USD1.7 billion) and CNY17 billion in the six months ended June 30, according to data provider Wind Information. Yet only 68 of these have released their performance forecasts so far.

Beijing Capital Development is bracing for the biggest losses at between CNY1.7 billion (USD236.6 million) and CNY2.2 billion, followed by Jinke Property Group and Yango Group with over CNY2 billion each, Wind said.

Overseas Chinese Town Group and China Fortune Land Development expect to each lose between CNY1 billion (USD139 million) and CNY1.7 billion, and another 10 companies including Financial Street Holdings will run up a deficit of between CNY100 million (USD14 million) and CNY900 million each.

The 38 firms attributed their losses to fewer houses delivered, a shrinking gross profit margin due to reduced prices, as well as rising expenses and a decline in asset value.

Financial Street, for example, slashed prices in the first half. As a result, the number of transactions jumped 30 percent year on year and payments received soared 60 percent. But the Beijing-based company still lost money as its gross profit margin shrivelled, it said.

Only seven expect to return to profit in the first half, after losing money in the same period last year, Yicai Global noticed. RiseSun Real Estate Development and Shenzhen New Nanshan Holding managed to turn losses into gains due to an uptick in business, but the other five did so thanks to a jump in non-operating income and better returns on investment.

Developers are struggling because of sluggish sales. The sales area plunged 5.3 percent in the first six months from a year earlier to 595.2 million square meters, according to data released by the National Bureau of Statistics last month. Of this, the sales area of residential homes sank 2.8 percent

But total transactions climbed 1.1 percent to CNY6.3 trillion (USD882.2 billion), of which residential homes advanced 3.7 percent, the NBS said.

Editors: Tang Shihua, Kim Taylor