Guangzhou Auto bides time for A-share listing

PUBLISHED : Wednesday, 01 September, 2010, 12:00am
UPDATED : Wednesday, 01 September, 2010, 12:00am

Guangzhou Automobile Group says it is waiting for the right time to list on the A-share market, after listing successfully on the H-share market.

'The management's goal is to list on both the mainland and Hong Kong stock markets,' Guangzhou Auto chairman Zhang Fangyou said. 'But we don't have an exact timetable for getting back to the A-share market now because the market is volatile.'

Guangzhou Auto, which makes the Toyota Camry and Honda Accord in joint ventures with Japan's two biggest carmakers, yesterday announced its first interim results since making its H-share trading debut on Monday.

It said net interim profit more than tripled to 2.31 billion yuan (HK$2.64 billion), powered by strong revenue, which rose to 28.9 billion yuan from 20.67 billion yuan. It declared an interim dividend of 9 fen per share.

Guangzhou Auto expects total vehicle sales on the mainland to jump 15 per cent to 16 million units by the end of the year. It said it would focus on expanding capacity to make economy cars in the second half.

'With only about 9 per cent (of) sales deriving from sales of small economy cars ... Guangzhou Auto is making an organic foray into that segment of the Chinese market with the impeding introduction of its Trumpchi and Linian models,' analyst Steve Man of Samsung Securities said.

The carmaker aims to boost annual production capacity to more than 1 million vehicles by the end of this year from 606,600 last year.

'The production capacity of Guangqi Honda (Guangzhou Auto's Honda joint venture) will be increased to 480,000 units per year from 360,000 units, and we plan to meet total production of 100,000 own-brand cars by next year and 140,000 cars with [another joint venture partner] Fiat in the first half of 2012,' Guangzhou Auto general manager Zeng Qinghong said.

Guangzhou Auto, which has spent more than 10 years restructuring in preparation for listings in Hong Kong and the mainland, started trading in Hong Kong this week after privatising its Hong Kong-listed subsidiary Denway Motors, the sixth biggest car group in the country.

'We expect Guangqi Honda and Guangzhou Toyota to outperform the market in the next few years,' analyst Hou Yankun of Nomura Holdings said. Guangzhou Auto has acquired sport utility vehicle-maker Hunan's Changfeng (Group) and Zhejiang's private carmaker Gonow as a way to boost total sales and diversify its product line.