Country Garden, which is one of China’s biggest property developers, has warned that it could see a loss of up to $7.6bn (£6bn) for the first six months of the year.
The announcement is the latest sign of the major issues faced by the world’s second largest economy.
This week official figures showed China had slipped into deflation for the first time in more than two years.
Exports have also fallen sharply, while youth unemployment is at a record high.
Shares in Country Garden Holdings were down by more than 5% in Hong Kong trade on Friday afternoon.
Country Garden “is expected to record a net loss ranging from approximately RMB45 billion [$6.24bn; £4.9bn] to RMB55 billion for the six months ended 30 June 2023,” the company said in an announcement to the Hong Kong Stock Exchange, external.
The expected loss compares to a $265m profit for the same time last year.
The firm also said it has set up a special task force, headed by its chairman Yang Huiyan, to find ways to turn the business around.
Earlier on Thursday, rating agency Moody’s downgraded the company’s rating, citing “heightened liquidity and refinancing risks”.
It came as China faced a number of economic challenges, which have raised questions about the pace of its post-pandemic recovery.
Earlier this week, official figures showed the country’s exports fell by a larger-than-expected 14.5% in July compared with a year earlier, while imports dropped 12.4%.
Youth unemployment, which is at a record high, is also being closely watched as a record 11.58 million university graduates are expected to enter the job market this year.