Guangzhou Automobile Group Announces A Shares First Interim ...

Guangzhou Automobile Group Announces A Shares First Interim Results

August 29, 2012 | No Comments

Net Profit in First-Half nearly RMB1.5 billion

HONG KONG, Aug. 29, 2012 /PRNewswire-Asia/ ? Guangzhou Automobile Group Co., Ltd. (?Guangzhou Automobile Group? or the ?Company?; stock codes: 2238.HK; 601238.SH), today announced its interim results for the first half of 2012. Interim report shows that the sales revenue of the Company amounted to RMB5,482 million, an increase of 5.67% compared to the same period last year. The Company and its joint ventures and associated companies realized total revenues of approximately RMB78,816 million, an increase of approximately RMB9,987 million, or approximately 14.51% compared with the same period last year. The net profit attributable to equity holders of the Company amounted to RMB 1,482 million and the earnings per share were RMB0.24. The Board of Directors recommended a payment of an interim dividend of RMB0.07 per share (including tax) for the year ended 30 June 2012.

After consecutive years of rapid growth, China?s automobile production and sales have entered the high consolidation phase in the past two years. In the first half of 2012, subject to the slowdown in domestic macroeconomic growth and automobile purchase restriction in some cities, the sales of the domestic automobile market recorded a significant reduction compared to the same period last year. According to the statistics from the China Association of Automobile Manufacturers, the production and sales of cars in the first half of this year were 9,529,200 units and 9,598,100 units respectively, representing a respective increase of 4.1% and 2.9%, compared to the same period last year and translating to a modest growth in the overall automobile production and sales. The production and sales of motorcycles were 11,629,100 units and 11,738,100 respectively, representing a respective decrease of 11.41% and 10.82% compared to the same period last year and reaching their lowest in the past six years over the same period.

Despite the adverse impacts of the slowdown in macroeconomic growth and automobile industry growth, the Company managed to realize sales growth in the sluggish market environment through market development, inventory adjustment, cost reduction and marketing, based on the interim report of the Company.

In the first half of this year, Guangzhou Automobile Group realized sales volume of 369,700 units, an increase of 17.25% compared to the same period last year. Among which the sales of passenger vehicles amounted to 351,800 units, an increase of 15.32% compared to the same period last year while the sales of commercial vehicles amounted to 472,100 units, an increase of 13.80% compared to the same period last year. In the first half of this year, the year-on-year growth in the Company?s sales of both vehicles and motorcycles was higher than the industry average.

In the light of the difficult market environment and fierce competition, Guangzhou Automobile Group run sales promotions for some of its brands, resulting in a decline in profit margins and a modest drop in net profit compared to the same period in 2011.

In addition to the relatively fast growth in sales, the Company made significant achievements during the first half of this year, including the listing of A shares, research and development, introduction of new products, construction of production capacity, expansion of business chain and the innovation in management mechanism.

Based on the interim report, the asset restructuring involved in the Guangzhou Automobile Group?s convertible merger with GAC Changfeng and the follow-up work of the joint venture with Mitsubishi Motors are advancing smoothly. The new 2.4L Crosstour, launched by Guangqi Honda, a major investee of the Company, was well received. GAC Toyota CAMRY pushed forward the application and promotion of hybrid vehicle technology while realizing the upgrade of CAMRY while CAMRY HEV, a model of petrol and electric hybrid powered vehicle, has also been formally launched onto the market. The independent innovation and proprietary brand of the Company realized new breakthroughs. Trumpchi GS5, the first SUV model of proprietary brand which has been produced and sold since April, completed C-NCAP test and assessment in May and obtained five-star assessment of scores of 49.1. Its market response was good and sales increased every month. Construction of the plant of GAC FIAT was successfully completed on 28th June, and the first model of vehicle, Viaggio, of GAC FIAT formally commenced production. The completion of the new plant and the addition of new product will further enhance the Company?s capacity and enrich the production line. In addition, Guangzhou Automobile Group provides sales of cars, after-sales service, logistics and import and export, car leasing, automobile finance and insurance services through Guangzhou Automobile Group Business Co., Ltd, GAC-SOFINCO Automobile Finance Co., Ltd. and Urtrust Insurance Co., Ltd., which develops and upgrades the chain synergies of the automotive industry.

Looking into the second half of 2012, ChairmanMr. Zhang Fangyou commented, ?In the second half of this year, although the downward pressure on China?s economy still exists, favorable factors are increasing. For instance, it is expected that the Chinese economy will take on the momentum of gradual recovery driven by the series of measures launched by the government to stabilize the economy. As for the automotive industry in mainland China, although it is affected by the inertia effect of the sluggish market which may result in the slight increase in production and sales, the overall automotive market will maintain its growing trend driven by urbanization, in particular the development of the second, third and fourth-tiered cities. The focus of the development in the automotive market will, therefore, gradually shift to the third and fourth-tiered cities. In the second half of the year, the Company will further heighten its senses of crisis and responsibility, fully explore the market opportunities, adjust and optimize product types and structure, innovate its ways of marketing and speed up its response to the market. Meanwhile, it will further deepen its joint-venture cooperation, strengthen proprietary innovation, boost the support between the upstream and downstream of industry chain and focus on sharpening its competitiveness edge to generate better results for shareholders.?

About Guangzhou Automobile Group Co., Ltd.

Guangzhou Automobile Group Co., Ltd. (hereinafter ?GAC?) was established in June 1997 as a limited liability company and was integrally converted into a joint stock company on 28 June 2005. GAC was listed on the Main Board of the Stock Exchange of Hong Kong Limited on 30 August 2010. GAC?s main business consists of research and development, manufacturing and sales of passenger vehicles, commercial vehicles, motorcycles, engines, motorcycles and other auto parts, as well as automobile sales, car leasing, after-sale services, import and export of automobile-related products, logistics services, automobile finance and insurance services.

For further information, please contact:

Porda Havas International Finance Communications Group

Ms. Alman Loong?? +852-3150-6731 alman.loong@pordahavas.com
Ms. Jung Chang?? +852-3150-6705 jung.chang@pordahavas.com
Ms. Jacqueline Tang +852-3150-6704 jacqueline.tang@pordahavas.com
Fax:????????+852-3150-6728

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