SHANGHAI (Reuters) – Geely Automobile Holdings Ltd on Monday booked a 43% drop in half-year profit and trimmed its full-year sales goal, sending its shares down 4%, as the coronavirus outbreak continues to trouble the world’s biggest auto market.
FILE PHOTO: The logo of Chinese carmaker Geely Auto is pictured at the second media day for the Shanghai auto show in Shanghai, China, April 17, 2019. REUTERS/Aly Song
The results come as China’s overall auto sales slowly recovers from a virus-blighted start to the year. Sales climbed for the fourth consecutive month in July yet are still down 12.7% for the year to date.
China’s highest-profile automaker – due to group investments in Volvo Cars and Daimler AG – posted January-June net profit of 2.3 billion yuan ($331.37 million).
It sold 530,446 vehicles, down 19% on year, leaving revenue down 23% at 36.82 billion yuan, meeting analyst estimates.
“Geely’s 1H20 earnings are largely in line with our expectation, thanks to its significant cost cut efforts, especially in wages and investments in fixed assets,” said Haitong International analyst Shi Ji.
However, the automaker knocked 6% from its full-year sales goal to 1.32 million vehicles – down 3% on year – just two weeks after maintaining a target set shortly before China’s virus lockdown in January.
Geely’s share price fell as much as 4%, versus a 1.5% rise in the benchmark Hang Seng Index.
Geely has a market capitalisation of about $21.2 billion, eclipsing international peers better known outside of China such as Fiat Chrysler Automobiles NV and Nissan Motor Co Ltd.
Its parent, Zhejiang Geely Holding Group Co Ltd, plans to merge the automaker with affiliate Volvo Cars and list the successor in Hong Kong and possibly Stockholm.
Merger talks were suspended in June, however, while the Hong Kong-listed automaker worked on listing shares on mainland China’s Nasdaq-like STAR board.
Geely plans to revamp factories at home and abroad using manufacturing platforms developed with Volvo Cars since 2013. It also aims to start European exports this year of sport-utility vehicle 01 under its premium brand Lynk & Co.
Reporting by Yilei Sun and Brenda Goh; Editing by Sayantani Ghosh and Christopher Cushing