Sales fuel Guangzhou Auto's net profit
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Guangzhou Automobile Group said its net profit in the first half of this year more than tripled as it benefitted from the Chinese government's incentives which propelled car sales.
Net income surged to 2.31 billion yuan (US$339 million), or 0.587 yuan per share, from 640 million yuan a year ago, the auto maker said in a statement yesterday. In 2009 the auto maker earned 2 billion yuan.
Sales soared 39.8 percent to 28.9 billion yuan, the company said.
Guangzhou Auto will offer shareholders an interim dividend of 0.09 yuan per share. The aggregate sales volume of the group, together with its associated subsidiaries, rose 35.5 percent annually to 348,677 units in the first six months.
Guangzhou Auto completed its takeover of Hong Kong-listed Denway Motors last week and started trading in Hong Kong on Monday. Guangzhou Auto, the nation's sixth-largest car maker by sales volume and the Chinese partner of Toyota Motor Corp and Honda Motor, said in early June it would exchange 0.47 share for each share of the remaining 62 percent stake in Denway.
Shareholders of Denway approved the deal in mid-July and it was delisted from the Hong Kong stock exchange last Wednesday.
The share swap not only gave Guangzhou Auto access to Denway's factories in southern China, but also opened more fund-raising channels to enable the auto maker to compete with SAIC Motor Corp and rivals.
The car maker has said it hopes to boost annual output capacity to more than a million units by the end of this year, compared with around 606,600 in 2009.
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