MAINLAND companies in Hong Kong are abandoning a long-held practice of reporting earnings in dollars in favor of the yuan.

    Want Want China Holdings made the switch for the first time since its 2008 listing when reporting first-half earnings last month, while Hengan International Group dropped the Hong Kong dollar figures it has used since at least 2001. China Resources Beer (Holdings) said it moved to yuan-denominated reports to reduce the impact of currency moves.

    While Capital Link International Holdings said the growing international importance of the yuan means it no longer makes sense for the nation’s companies to report in a foreign currency, JP Morgan Chase & Co. says the weaker Chinese currency is triggering the move.

    “It’s flattering when the yuan is appreciating but it makes the numbers poor when the yuan is falling,” said Adrian Mowat, the chief Asian and emerging-market equity strategist at JP Morgan. Companies “recognize after recent yuan weakness that it makes the numbers less favorable in Hong Kong dollars.”

    The yuan has fallen 9.2 percent against the U.S. dollar since the start of 2014, after climbing 37 percent in the previous 10 years. An unexpected devaluation in August last year fueled volatility in the currency.

    The yuan is more suitable currency because most of the company’s revenue is from China and recent fluctuations in the exchange rate has no direct relevance to business operations, Want Want said in a statement. The seller of snack foods and beverages said more than 90 percent of its revenue and business activities are on the mainland.

    Hengan, which makes diapers, said the yuan is more representative of its business operations.

    “If you have more business in China and your revenue, expenses are more related to the yuan, it makes sense to switch your base currency,” said Tai Hui, chief Asia market strategist at JP Morgan Asset Management. “Ultimately it’s about exchange rate management.”

    (SD-Agencies)