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In 2011, due to multiple factors such as the adjustment of the macro economy, the introduction of some urban auto restriction policies, and the withdrawal of auto consumption stimulus policies, the Chinese auto market experienced a dramatic decline after two years of rapid growth. In this round of general trend, Changan Automobile's performance in the stock market is also unavoidably affected.
It is understood that from January to June 2012, it is expected that the net profit attributable to shareholders of the listed company will be about 530 million to 580 million yuan, a year-on-year decrease of 44.23% to 49.04%.
There are two main reasons for the decline of shareholders’ profit: First, during the reporting period, the company’s automobile sales volume decreased year-on-year, and investment income from joint ventures decreased, resulting in a significant impact on the company’s performance from January to June. Second, the impact of non-recurring gains and losses from government subsidies on net profits. According to preliminary estimates of the financial department of Chongqing Chang'an Automobile Co., Ltd. (hereinafter referred to as Changan Automobile Company), the company's consolidated net profit for the half of 2012 was approximately 5.3 to 5.8 billion yuan, of which approximately 100 million yuan was from government subsidies.
Changan Automobile's bounce back or bottoming out has been flat for the current auto stocks, but some auto stocks are still strong. What are the reasons?
Li Guo-hung, chairman of the Zhongguancun Capital Market Research Association, said that China is still a big country for car sales, and its consumption growth is still relatively obvious compared with foreign countries. China is still in a momentum of automobile development. The overall performance of listed companies remained basically stable, although there was no significant increase. However, compared with other sectors of cyclical industry, it has its own certain advantages and shows the preference of investors, especially institutional investors, in terms of valuation.
In the stock market of the entire Chinese auto sector, the performance of listed companies presents a different change as the economic climate changes. During the downturn of the auto industry, analysts suggested buying Changan Automobile. Changan Automobile may rebound into the period of rapid development.
Chang'an rebounded or bottomed out in the second half of the year
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