Recently, A-share companies wrapped up their third-quarter earnings disclosures. As a single line item with significant impact on profits, asset impairment figures in financial statements often draw market attention. Meanwhile, as the final periodic report before annual results are released, the third-quarter report offers some indication of full-year operating conditions, and material asset impairment matters warrant close scrutiny.
Asset impairment losses are an income statement item. Simply put, when an asset's estimated recoverable value falls below its carrying amount after an impairment test, the listed company must recognize an impairment loss, reducing the asset's book value and lowering current-period profit. Common asset impairment losses include inventory write-downs and fixed asset impairment losses.
Based on incomplete statistics from Tonghuashun iFinD data, in the third quarter of 2026, more than 4,500 companies recognized or reversed asset impairment losses. On a net basis, over 3,300 companies recorded impairment charges. Among them, the largest single-quarter asset impairment loss was recorded by Cnooc Limited (600938.SH), which recognized 7.24 billion yuan in asset impairment losses during the quarter. It was followed by China Petroleum & Chemical Corp (600028.SH), Contemporary Amperex Technology Co Ltd (300750.SZ), Huafa Industrial Co Ltd (600325.SH), People's Insurance Co Group of China Ltd (601319.SH) and BYD Co Ltd (002594.SZ), each of which recorded single-quarter impairment charges exceeding 1 billion yuan.
Top 10 A-Share Companies by Asset Impairment Losses in Q3 2026; Source: Tonghuashun iFinD, compiled by Caiwen
By industry, the above companies are fairly representative. Among Shenwan secondary industries, companies in oil and gas exploration II, batteries, real estate development, photovoltaic equipment, and refining and trading recorded the highest total asset impairment losses in the third quarter.
Asset impairment losses by industry in Q3 2026 and comparison with the prior year; Source: Tonghuashun iFinD, compiled by Caiwen
Cnooc Limited's main business is the exploration, development, production and sale of crude oil and natural gas. Its primary products are crude oil and natural gas. The 7.24 billion yuan single-quarter asset impairment loss is the largest the company has recorded in any single quarter over the past two years. The last time the company had an impairment loss exceeding this scale was in the fourth quarter of 2024, when long-term equity investment impairment losses and oil and gas asset impairment losses contributed significantly, bringing the full-year asset impairment loss to 8.047 billion yuan.
The breakdown of the third-quarter asset impairment loss was not disclosed in the quarterly report. However, according to The Paper, during a conference call held after the results release, several investors raised questions about the reasons for the impairment. Cnooc Limited responded that due to the impact of relevant factors on certain overseas assets, their operating environment changed and related production and sales arrangements were adjusted, causing the estimated future net cash flows to fall below previously projected amounts, which constituted an indication of impairment. When asked whether the impairment was already sufficient in the third quarter and whether further impairment might occur in the fourth quarter, Cnooc Limited stated that it would make judgments strictly in accordance with accounting standards at the year-end reporting date.
Unlike Cnooc Limited, China Petroleum & Chemical Corp, which ranked next in third-quarter asset impairment losses, has maintained a high level of asset impairment losses in recent years. For the full year of 2025, China Petroleum & Chemical Corp recognized 12.953 billion yuan in asset impairment losses. In the first half of 2026 alone, the company recognized 15.681 billion yuan in asset impairment losses. Adding the 2.538 billion yuan in the third quarter, the first three quarters' asset impairment losses reached 18.219 billion yuan. In terms of the half-year situation, the asset impairment losses were mainly inventory write-down provisions. In the first half of 2026, as oil prices surged and then retreated, some of the company's crude oil and refined product inventories showed signs of impairment.
The asset impairment provisions of Contemporary Amperex Technology Co Ltd and Huafa Industrial Co Ltd appear to have industry-specific characteristics. Contemporary Amperex Technology Co Ltd recognized 1.712 billion yuan in asset impairment losses in the third quarter, with inventory write-downs caused by lithium carbonate price fluctuations being an important factor. Lithium battery company Penghui Energy Co Ltd (300438.SZ) also stated in a survey after its quarterly report disclosure that the sequential increase in inventory write-down provisions was mainly due to falling prices of the key raw material lithium carbonate, combined with the impact of consumption tax on impairment test calculations, resulting in a significant quarter-on-quarter increase in inventory impairment provisions in the third quarter.
Huafa Industrial Co Ltd is a real estate enterprise. Against the backdrop of the broader industry environment, the company's pace of recognizing asset impairment losses lagged behind its peers. It only began recognizing asset impairment losses exceeding 5 billion yuan in 2025. In the first three quarters of 2026, the company recognized 2.678 billion yuan in asset impairment losses. In terms of the industry situation, although overall risk exposure has persisted for some time, the overall scale of impairment provisions by real estate developers in the third quarter of 2026 remained considerable compared with other industries, and some companies still saw year-on-year increases in provisions. For example, in addition to Huafa Industrial Co Ltd, Fuxing Co Ltd (000926.SZ) recognized 2.615 billion yuan in asset impairment losses in the first three quarters, exceeding the full-year 2025 level of 2.462 billion yuan. However, compared with the same period last year, the overall impairment level of real estate developers has decreased significantly.
Companies in the photovoltaic equipment industry also recognized large-scale asset impairment losses due to industry sentiment issues. Tongwei Co Ltd (600438.SH) recognized 2.722 billion yuan in asset impairment losses in the first three quarters of 2026, a year-on-year increase of 25.17%. According to detailed notes disclosed in the interim report, inventory write-down provisions caused by inventory price fluctuations were relatively large. In recent years, the photovoltaic industry's sentiment has been declining. For the full year of 2025, Tongwei Co Ltd's asset impairment losses reached 5.018 billion yuan. Entering 2026, this situation has not been fundamentally improved. Tongwei Co Ltd mentioned during a survey in September that the overall supply-demand imbalance in the photovoltaic industry has not yet been fundamentally improved, product prices at various stages remain sluggish, and operating pressure on companies is significant.
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