BIZCHINA / Top Biz News |
Shanghai Auto posts lower net profit in 3rd quarter(Reuters)Updated: 2006-10-31 13:45 The listed arm of General Motors' main Chinese partner posted a 17-percent fall in third-quarter earnings from a year earlier on Tuesday as costs for development of new cars increased. Shanghai Automotive Co. Ltd., owner of a fifth of GM's largest car venture in China, said third-quarter net profit dropped to 284 million yuan (US$36 million). Full-year net profit at the listed arm of China's biggest car maker, SAIC Motor Corp., is expected to jump over 70 percent to 1.89 billion yuan, according to the mean forecast from three analyst forecasts surveyed by Reuters Estimates. Analysts had raised their full-year forecast strongly from 1.29 billion in early August after an asset injection from its parent. "Faced with increasing competition in the market, our company continues to develop technology and new products more rapidly to be able to strengthen our competitive advantages," the firm said in a statement. Third-quarter turnover rose 16 percent to 2.22 billion yuan. Shanghai Auto shares rose 0.4 percent at 5.28 yuan by GMT 0345 on Tuesday, underperforming a 0.8 percent rise in the benchmark index. Shares in the firm fell 11 percent in the third quarter, when the index rose almost 5 percent. Shanghai Auto derives most of its earnings from its tie-up with GM, which reported a 36.7 percent jump in its sales volume in China to 645,680 cars in the first nine months of this year. In contrast, passenger car sales in China, the world's second-biggest vehicle market, rose 31.39 percent in the January-September period, according to industry data. SAIC unveiled plans last month to sell its key operations to Shanghai Auto in a deal worth US$2.4 billion, securing a fund-raising channel to aid the group's global expansion. Assets to be injected include SAIC's own stakes in ventures with GM and Volkswagen AG, company executives said. (For more biz stories, please visit Industry Updates) |
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