Shanghai Automotive posts growing profits
By Yu Qiao (China Daily)
Updated: 2004-08-28 09:06

Shanghai Automotive Co, the listed arm of China's top car maker Shanghai Automotive Industry Corp (SAIC), has reported a 49.1 per cent jump in net profits during the first half of this year, boosted by strong performance of its joint venture with General Motors (GM).

The company's first-half net profits stood at 1.43 billion yuan (US$172.71 million), up from 960.44 million yuan (US$115.99 million) a year earlier, it said on Friday in a statement to China Securities Journal.

Its earnings per share grew by 14.7 per cent year-on-year to 0.44 yuan (US$0.053) in the first six months of this year.

Analysts say that the joint venture with GM, in which Shanghai Automotive controls a 20 per cent stake, made a big contribution to its profit jump.

The venture's sales surged by 79 per cent to 161,000 cars in the first seven months of this year, making it the second biggest car producer in China after SAIC's joint venture with Volkswagen.

Profits of the venture with GM more than doubled that of the SAIC-Volkswagen venture last year thanks to its lower costs, although the former's unit sales were half of the latter.

Shanghai Automotive's bullish results came amid overall decelerating car sales in China. Sales of domestically made passenger cars rose by 27.1 per cent to 1.34 million units in the first seven months of this year. The growth rate was down from 75 per cent in the whole of last year.

The slowing car sales have greatly affected many of other domestic auto stocks, such as Tianjin FAW Xiali and Shenyang Jinbei Automobile, which suffered a profit dive of 78.8 per cent and a net loss of 87.6 million yuan (US$10.6 million) respectively during the first half of this year.

Shanghai Automotive ended at 8.3 yuan (US$1) per share on Friday, up 6 per cent.

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