The resurgence of COVID-19 cases in China in 2022 is causing supply-related issues for Chinese companies yet again. Amidst the persistent lockdowns, the sentiment* of China-based companies around ‘Supply’ and related keywords in the earnings call transcripts declined by 5% during Q1 2022 over Q4 2021, finds GlobalData, a leading data and analytics company.

GlobalData’s latest report, ‘Company Filings Analytics Trends & Signals Q1 2022’, reveals that overall company earnings call transcript mentions and sentiment of ‘Supply Chain’ plateaued in Q1 2022. Yet it remained a key topic of discussion during the quarter when compared year-on-year. The report also found that Technology, Consumer/Packaging, Construction and Oil & Gas companies majorly discussed ‘Supply Chain’.

Rinaldo Pereira, Business Fundamentals Analyst at GlobalData, comments: “Supply chain disruptions were already apparent in 2021, as companies tried to mitigate issues by turning to alternate suppliers or locations. The current disruptions in China seem to be worsening as ports and distribution networks are already struggling due to harsher lockdowns. Company filings data indicate that while there is a hint of positivity around optimizing supply and capacity, Chinese firms appear to be concerned about maintaining production or capacity due to uncertainties.”

Non-Asia-Pacific (APAC) companies’ Q1 2022 sentiment around China improved with an 8% sequential growth. However, Q2 2022 (until 22 April) sentiment is down 15%. Corporates are worried about rising costs, supply limitations and higher prices. KONE Corp., Otis Worldwide Corp, IPG Photonics Corp, Beiersdorf AG, and The Procter & Gamble Co were some non-APAC companies with the most mentions of China during earnings calls in Q1 2022.

Pereira concludes: “China-related issues are adding to the plight of companies already facing headwinds from inflation or other pandemic-related challenges. Firms expect muted recoveries or slower growth in China during Q2 2022 and are optimistic for the latter half of the year.”

*GlobalData uses an advanced machine learning algorithm to calculate sentiment in a range of 0 to 1, with 1 being the most positive.