Target cut as sales sputter
Geely Automobile (0175) cut its full-year sales target [b]by 25 percent[/b] to 430,000 cars as first-half net profit fell 20 percent from a year earlier to 1.11 billion yuan (HK$1.4 billion).
Car sales declined 29 percent on-year to 187,000 units, reaching just 32 percent of its earlier annual target of 580,000 units.
Domestic sales tumbled 28 percent while exports fell 32 percent.
Earnings per share slid 25 percent to 12.65 fen and no interim dividend was proposed.
A major product upgrade cycle and a major reshuffle of the sales and marketing system hurt short-term revenue in the first six months of the year.
Chief executive Gui Shengyue blamed a drop in exports largely on product adjustments and political instability in foreign markets. With three new models to be launched this year, Gui expects revenue to rebound.
More mainland civil servants will buy Geely cars due to an anti-graft drive that is deterring them from buying luxury cars, Gui said.
Geely also expects to benefit from anti-monopoly investigations targeting foreign automobile companies.
Gui believes government restrictions on car purchases to reduce pollution will have little impact on the firm, as the rule applies to first-tier cities and most of Geely's revenue comes from second and third- tier cities. Shares rose 0.65 percent to HK$3.09.
Source: The Standard HK