Date
22 October 2017
Great Wall Motor is said to be launching promotional campaigns, including offers of complimentary oil cards and free iPads at its 4S stores across China, to reignite sales. Photo: BitAuto
Great Wall Motor is said to be launching promotional campaigns, including offers of complimentary oil cards and free iPads at its 4S stores across China, to reignite sales. Photo: BitAuto

Great Wall’s first-half figures fuel fresh worries

Great Wall Motor’s (02333.HK, 601633.CN) woes appear to be far from over.

First-half operational data released by the mainland sport utility vehicle (SUV) maker last Friday pointed to weakening production and sales figures, denting investor confidence further after the repeated delays earlier of H8, the firm’s premium SUV line that was touted as a Chinese Land Rover.

Production and sales showed double-digit declines in June. In the first six months, production fell 6.6 percent and sales dropped 5.6 percent to 343,000 units and 347,000 units respectively.

The counter’s H-share price last traded at HK$30.15 Wednesday morning, down 0.82 percent. Compared to its all-time high of HK$52.98 last October, the company has lost more than 40 percent of its market value.

Great Wall’s A-share market capitalization once topped that of Shanghai Automotive Industry Corp. (600104.CN), but it is now worth just half of the state-owned auto giant.

To bolster its finances, Great Wall trimmed its research and development investment on sedan models and is also said to have laid off some workers. The company is evidently putting most of its resources into the SUV business.

As always, there are mixed opinions among brokerages about the automaker’s prospects.

Sinolink Securities (600109.CN) and CITIC Securities (600030.CN) are optimistic that there will be a rebound in sales, pointing to six new SUV models that will hit the market in the next 12 months. China International Capital Corp., however, advises investors to remain cautious and wait for the firm’s interim report in August for more clarity on the business.

– Contact the writer at [email protected]

RC

EJ Insight writer

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