STOCKHOLM (Reuters) – Ericsson’s second-quarter results will take a hit of about 1 billion Swedish crowns ($108.8 million) due to write-downs of product inventory in the Chinese market, the firm said on Monday.

The telecoms gear maker, which had won 5G contracts from three major operators in China, said margins in the second quarter of 2020 will be negative due to high initial costs for new products.

Ericsson also maintained its financial targets for 2020 and 2022.