HONG KONG -- Shares in Brilliance China Automotive Holdings Ltd., China's largest minibus maker, skidded nearly 11 percent on Monday after its auditor resigned, the latest blow to a stock hit hard this year.
The resignation by PricewaterhouseCoopers comes as Brilliance, the Chinese joint venture partner of Germany's BMW AG, suffers along with other mainland vehicle manufacturers as sales growth in the once-hot sector has slowed dramatically.
The stock has plunged nearly 64 percent since the start of the year. Hong Kong-listed Chinese rival Denway Motors Ltd., by comparison, has fallen 31 percent since the beginning of 2004.
"The market is getting a bit frustrated with this company, and they are not going to give the company the benefit of the doubt if something like this happens," said Standard & Poor's equity analyst Christopher Lee.
Brilliance's first-half earnings fell by 29 percent.
"The worst-case scenario is that the entire market is underestimating the earnings decline," said Nomura analyst Phoebe Wong, who has a "reduce" rating on the stock and expects the company's full-year earnings to fall by 30 percent.
Brilliance, which was the first mainland company to be listed in New York when it debuted on the Big Board in 1992, said late on Friday that PricewaterhouseCoopers has tendered its resignation as its auditors and that the company was in discussions to replace them.
Brilliance said that no reason was stated in the resignation letter and the board was not aware of any other fact or circumstances that should be disclosed to shareholders. The company said the audit for 2004 had not yet begun.
A spokeswoman for PricewaterhouseCoopers in Hong Kong declined comment, citing client confidentiality.
Brilliance has been beset by industry-wide woes as well as its own problems.
In September, the company scaled back its full-year sales target for its new BMW joint venture from 18,000 cars to "more than" 10,000 units amid the industry downturn. It also cut sales targets for its minibuses and home-grown Zhonghua sedans.
In August, Brilliance denied media reports that its top four executives had resigned. The four executives had, however, reduced their stakes in the company.
The company's current chairman assumed his post after his predecessor, Yang Rong, fled to the United States in 2002 after being accused of unspecified economic crimes.
Last year, Yang filed a lawsuit from the United States against the Liaoning provincial government, trying to recoup investments in Brilliance and other seized assets. His controlling 39.45 percent stake in Brilliance was bought by a Liaoning-controlled company in late 2002.
Analysts expect car sales in China to rise by just 10-20 percent this year after they doubled in 2003 to about 2 million sedans, as Beijing's economic cooling efforts have curbed demand.