Shanghai Automotive Co, the listed arm of China's top carmaker
SAIC Motor Corp, yesterday said it expects first-quarter profit to
more than quadruple, boosted by a massive asset injection from the
parent in December and brisk sales.
But the firm didn't provide a profit figure in a statement to
the Shanghai Stock Exchange. It is scheduled to reveal
January-March profit on April 28.
Shanghai Auto reported 222.9 million yuan in net income in the
first quarter of last year, with earnings per share at 0.068
yuan.
The company in December spent 19.1 billion yuan in stocks,
buying assets from SAIC Motor, including those of two car ventures
with General Motors and Volkswagen. The move enabled the parent to
list in its entirety.
SAIC Motor's stake in the listed firm increased to 84 percent as
a result of the deal.
Shanghai Auto also attributed the expected profit rise to brisk
sales in the first quarter.
SAIC Motor yesterday said its sales from January to March,
including those from its South Korean unit Ssangyong Motors, surged
28 percent to 436,800 vehicles from the previous year.
Li Chunbo, an analyst with CITIC Securities Co in Beijing, said:
"As a market leader, Shanghai Auto is expected to perform strongly
this year and in the years to come thanks to the asset swap and
growing car demand in China."
Li estimates the company's 2007 earnings per share will be 0.57
yuan.
Shanghai Auto shares tumbled by 1.08 percent to 13.71 yuan
yesterday on the Shanghai Stock Exchange, following a surge of 5.2
percent on Wednesday.
China Association of Automobile Manufacturers has predicted that
sales of domestically made vehicles will reach 8.5 million units
this year, up from 7.22 million units last year.
Vehicle sales in China are forecast to exceed 10 million units
in 2010.
Shanghai Auto's joint venture with General Motors in Shanghai
sold 113,200 cars in the first three months of this year, up 26.5
percent year-on-year. Meanwhile, sales of its venture with
Volkswagen jumped 35.5 percent to 105,500 units.
Shanghai Auto said it has received more than 6,300 orders for
its own-brand Roewe sedan since the model was put onto the market
on March 5.
The 2.5-liter Roewe, based on the Rover 75 technology bought
from the failed British carmaker MG Rover, is Shanghai Auto's first
own-brand passenger car.
Analysts believe the company's own-brand cars will give a new
boost to its performance in coming years.
SAIC Motor announced last April that it planned to roll out 30
passenger car models under its own badges with a total investment
of 10 billion yuan by 2010, aiming to sell 200,000 own-brand cars
annually by then.
(China Daily April 6, 2007)