China’s Most Listed automobile companies show disappointing Q3 performance, expecting improvement in Q4

Gasgoo.com (Shanghai Oct 28) - Recently, most automobile companies published the Q3 financial announcements. Reporters from National Business Daily found that most companies have a decrease in their Q3 performance, with the market sales decline. The SUV market sale has become a key role in differences between listed automobile companies’ performance from January to September.

Great Wall Motor (SH601633)’s Q3 financial announcement revealed that it achieved an operating income of 52.604 billion RMB with an increase of 23.5%, and obtained a net profit owned to holders of 6.209 billion RMB with an increase of 11.1% in the previous three quarters.

Although Great Wall Motor performs well in the previous three quarters, it shows a decline in its Q3 profit, achieving operating income of 15.489 billion RMB with an increase of 10.2% and net profit of 1.492 billion RMB with a decrease of 8.6%.

In addition, Haima Automobile Group (SZ000572) published its Q3 financial announcement on October 24th. It revealed that Haima Automobile achieved an operating income of 7.863 billion RMB, decreasing 7.14% in the first three quarters; the decline of net profit reached 29.9% of 0.11 billion RMB.

Reporters from National Business Daily found that Haima Automobile’s performance decline was mainly influenced by its loss in Q3. Therefore, Haima Automobile explained that the loss of trading financial assets induced the performance decline on one hand, and more importantly, sales decline and price adjustment of automobiles had greater influence on the main business profit.

Statistics from CPCA show that Haima Automobile Group has a total sale of 115,600 in the previous three quarters, decreasing 8.38%.

FAW Car Co. Ltd. (SZ000800) is also influenced by the disappointing market performance. Its Q3 earnings preannouncement shows that its net profit is expected to decline 83.76%-95.94% in the previous three quarters, compared with the data in last year of 246,000 RMB.

In addition, JMC published its Q3 announcement, revealing that it has an increase in Q3 profit but a decline larger than 14% in operating income, compared with last year. JMC reached a total income of 16.96 billion RMB in the previous three quarters, declining 6.24% with last year. Analysis says that it is difficult for JMC to achieve its income forecast, influenced by decline in sales.

Analysis believes that worsening of automobile market is the most important factor influencing companies’ performance. Statistics from China Association of Automobile Manufacturers show that the total production and sales number of automobiles achieved 17,091,600 and 17,056,500 from January to September, declining 0.8% and increasing 0.3% respectively.

Market decline influenced relative companies’ sales on one hand, and stimulated automobile manufacturers to adjust price and promotion on the other hand, therefore influencing their profitability to a certain extent. Experts believe that stimulating polices such as vehicle sales tax relief will increase automobile market demand to some extent, thus improving companies’ performance in Q4.