Listing filing lifts shares in Great Wall

PUBLISHED : Tuesday, 02 August, 2011, 12:00am
UPDATED : Tuesday, 02 August, 2011, 12:00am

Shares in Hebei-based Great Wall Motors rose 3.2 per cent yesterday after the carmarker finally filed a listing document to Beijing regulators for its long-planned Shanghai share sale.

Great Wall, the mainland's biggest home-grown manufacturer of popular SUVs, said it would to sell up to 304.2 million A shares to fund a host of new investments in production capacity totalling 3.17 billion yuan (HK$3.82 billion).

The Shanghai offering has not been priced and still needs approval from the China Securities Regulatory Commission. But yesterday's closing price of HK$12.14 apiece for the company's Hong Kong-traded H shares implies Great Wall could raise something in the neighbourhood of HK$3.7 billion in a Shanghai offering.

Great Wall has been announcing on-again, off-again plans for a Shanghai listing since 2004, and finally secured approval from Hong Kong shareholders to proceed with the deal in November.

Rival mainland carmaker BYD Auto, backed by Warren Buffett, raised 1.42 billion yuan in June by listing 79 million A shares on the Shenzhen stock market.

The proceeds were about 35 per cent less than the maximum amount that BYD had initially sought to raise. But the firm's shares rose as much as 46 per cent on their June 30 trading debut.

Two weeks later, BYD announced that net profit for the first six months of the year probably fell by as much as 95 per cent, to between 121.06 million yuan and 363.18 million yuan. That represents a decline of 85 to 95 per cent from the 2.42 billion yuan profit the company booked in the same period a year earlier.

Great Wall's financials look altogether healthier. In its preliminary Shanghai listing document, the firm reported a first-quarter net profit of 875.39 million yuan on sales of 6.95 billion yuan.

The company did not provide a year-on-year comparison, but the first-quarter profit represents about 32 per cent of last year's 2.7 billion yuan full-year profit, which was up 169 per cent on 2009.

Great Wall is the mainland's biggest pick-up manufacturer and also makes the Hover, the best-selling homegrown SUV on the mainland. The company's total car and truck shipments rose a market-beating 47 per cent in the first half of the year to 178,485 units, according to J. D. Power and Associates figures.

Great Wall's recently launched Voleex C30 model accounted for 76,861 cars, or 43 per cent of total volume.

Shipments of its Hover H SUV, which retails from 93,000 yuan and is the mainland's best seller in its segment, rose 26 per cent to 65,942 units.

875.39m yuan

Great Wall's reported first-quarter net profit, in yuan, on sales of 6.95 billion yuan, according to its preliminary Shanghai listing document.