Shanghai Automotive Co Ltd Wednesday said its net profit last year rose 41.7 percent from 2002 to 1.5 billion yuan (US$181 million) boosted by revenue from its investment in Shanghai General Motors on the back of the booming car market in China.

The listed arm of China's biggest car seller, Shanghai Automotive Industry Corp, also disclosed in its annual report that it made a full provision of 396 million yuan for its investment in China Southern Securities, which was taken over in January by the Chinese stock market regulator and the Shenzhen municipal government for being heavily in debt.

Shanghai Automotive held 10.41 percent of China Southern Securities as the biggest shareholder.

The auto parts maker, which is the major supplier for the General Motors and Volkswagen local joint ventures, posted 1.3 billion yuan of investment profit last year, representing 79.4 percent of the total profit.

"The company's investment in Shanghai GM rose significantly as the whole automotive industry in China is growing rapidly," said Lu Qing, a Haitong Securities analyst. "But profits of auto companies and related firms may grow more slowly in future because they had risen from a low statistical base previously."

Lu added that most of the listed vehicle firms in China posted good performance, with output rising 80.7 percent year-on-year to 2.06 million units last year and is seen to surpass 2.5 million units this year.

Shanghai Automotive has a 20 percent stake in Shanghai General Motors, the 50-50 joint venture between SAIC and General Motors Corp. The maker of the Buick series sold 201,188 cars in China last year, an 81.6 percent year-on-year rise.

SAIC, which controls 70 percent of the automaker and is the local partner of Volkswagen AG and GM Corp, expects its sales volume to rise to 740,000 units this year, 143,000 units more than last year. Its total sales value, including mini-vans and other vehicles, is expected to rise 1.6 percent to 190 billion yuan from 187 billion yuan last year.

Local-currency A shares in Shanghai Automotive ended 0.92 percent lower at 15.14 yuan on the Shanghai market Wednesday.

(Eastday.com March 4, 2004)