SHANGHAI -- China's top minivan maker, Chongqing Changan Auto, said on Monday it is sticking to a forecast of a more than 50 percent annual rise in first-half profit despite a hit to May sales from the SARS virus.
But Chongqing Changan Auto Co. Ltd., which is building a $98 million car plant with U.S. giant Ford Motor Co., would not reveal the extent of the hit from the spread of Severe Acute Respiratory Syndrome.
"The company expects interim earnings for 2003 to rise more than 50 percent year on year," Changan Auto said in a statement published in the China Securities Journal.
"Sales fell slightly in May, impacted by the spread of SARS," a company executive told Reuters, declining to elaborate. "Details will be revealed in our first half report."
Changan Auto's Shenzhen-listed B shares, open to foreign and Chinese investors, were up almost two percent at HK$6.18 in late afternoon trade to become one of the day's best performers.
Its B shares have rocketed about 121 percent from around HK$2.80 at the end of October as investors took a bullish view of the rapidly expanding market, where vehicle sales rose 37 percent to 3.2 million last year.
SARS first appeared in southern Chin and the country has been the world's hardest hit. Although analysts had noted a rise in private car sales to people terrified of taking public transport during the outbreak, commercial vehicles might see a hit from the deadly disease.
First quarter earnings at Ford's sole CHinese partner grew more than fourfold. The executive declined to forecast Changan Auto's second half results, but said a prediction would be included in an interim results report expected in August.
Changan Auto and Ford made their first Fiesta compact in January at their plant in the southwestern city of Chongqing.
Sales of Changan Auto, China's fourth largest automaker, rose 91.6 percent year on year to 100,777 units in the first three months, while output climbed 50.5 percent to 92,673, helped by booming economic growth.
The company, which also has a venture with Japan's Suzuki Motor Corp., saw 2002 profit soar 420 percent year on year to 835 million yuan ($100.9 million).
Analysts expect 2003 results for listed Chinese auto makers will be less than spectacular due to pricing pressures in an increasingly competitive market and a price war.
In April, Changan Auto cut the price of one of its main products by 13 percent.
"I think profitability will come down quite far," said Lawrence Ang, auto analyst for Deutsche Securities. "I expect prices to fall 10 percent this year."