Daimler Truck Holding AG may cut its outlook following soft demand in China with the manufacturer taking an impairment charge on the value of its joint venture in the country. 

The German truckmaker reduced the book value of the Beijing Foton Daimler Automotive unit, triggering a negative non-cash impact on the truck and industrial business in Asia of €120 million ($131 million). Daimler Truck cited “persistent weak market development in China” for the change with its full-year guidance “under review,” it said late Tuesday.

Daimler Truck shares fell by as much as 4% in early trading Wednesday. The stock has gained 17% in the past year. 

“We have felt for some time that the existing guidance is unrealistic,” RBC analyst Nick Housden said in a note, noting that key questions around pricing and capacity adjustments are still unanswered.

China’s slowdown is hitting a range of industrial businesses in Germany with strong ties in the country, where a protracted real estate crisis is weighing on consumer spending. During the second quarter, the economy slowed more than expected with US tariffs adding to the drag. 

Siemens AG’s Chief Executive Officer Roland Busch last month said China’s economy could recover next year. 

Daimler Truck also reported preliminary second-quarter earnings before interest and tax of €1.08 billion, missing a company-provided consensus of €1.25 billion. The company is scheduled to report second-quarter results on Aug. 1.

(Updates with shares in third, analyst comment in fourth paragraph)

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