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Chongqing Chang'an Automobile Co Ltd, China's leading minivan-maker, yesterday reported a five-fold leap in 2002 net income, supporting its plan to raise 1.3 billion yuan (US$157 million) by selling new shares to domestic investors.
Chang'an Auto's profit soared 421.17 percent to 835 million yuan as sales jumped 35.13 percent to 301,852 vehicles, mainly buoyed by strong demand for vans in one of the world's fastest-growing auto markets.
Revenue soared 34.8 percent to 9.88 billion yuan, the company said in its earnings report, adding it will pay a dividend of 0.08 yuan per share.
Analysts credited the sharp rise in net profits to increased sales of high-margin products and reduced costs.
Chang'an, which occupies 8.3 percent of China's auto market, said financial expenses for the year fell a whopping 402.96 percent, while sales of comparatively expensive models rose a sharp 94.43 percent to account for 42.58 percent of sales.
The company, a partner of Ford Motor Co and Japan's Suzuki Corp, also predicted a bright 2003, saying its first-quarter net earnings may increase by more than a half year-on-year.
Chang'an plans to sell 150 million additional yuan-denominated Class-A shares this year. Chang'an's A shares and foreign-currency Class-B shares trade on the Shenzhen exchange.
The company will use the proceeds to build new vehicles and buy a 24-percent stake in its joint venture with Ford, Chang'an Ford, from Chang'an Automotive Group.
This will increase Chang'an Auto's share in the US$98 million venture to 50 percent.
Analysts expect Chang'an Ford to fuel Chang'an Auto's dynamic growth in the second half of 2003.
The venture introduced its first model, Fiesta compact car, in January, and it will begin producing Mondeo, a mid-size sedan, in the second half of the year. The venture hopes to sell 20,000 cars in China within the year and 50,000 in 2004.
Chang'an Auto's A shares have surged two-thirds, compared with the Shenzhen A share index's 8.7-percent gain.
Its B shares have also gained 40 percent this year, compared with a 13-percent rise in the Shenzhen B share index in the same period.
(Shanghai Daily April 9, 2003)
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