Great Wall Motor to list shares in Shanghai
Updated: 2008-03-13 07:05
By Karen Cho(HK Edition)
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Hong Kong-listed Great Wall Motor expects to trade its shares in Shanghai this year - the latest attempt by an H-share company to return to the domestic market for additional capital.
"Progress is good, and we expect A-shares to commence trading in May," Great Wall Motor Chairman Wei Jianjun told reporters at the company's 2007 financial results meeting yesterday.
The company makes pick-up trucks and sport utility vehicles. It first announced its desire to list on the mainland earlier this year, when it said it would issue no more than 122 million A-shares.
The lucrative A-share stock market had lured many Hong Kong-listed companies to seek a listing in the mainland market to tap into the large pool of capital.
Strong exports lift profits
The Baoding, Hebei-based automobile manufacturer's net profits in 2007 rose 33.3 percent to 937 million yuan.
The company's deputy general manager, Bai Xuefei, said good export performance in emerging markets such as Russia and South Africa were the major profit drivers for the company in 2007.
It sold more than 46,000 vehicles overseas - a 68.5 percent increase.
"The 2008 export-sales target is 80,000," Bai said.
Wei said the hike in steel prices is a global trend. However, he said, the impact will be relatively mild. "We were able to offset additional costs through savings from core-component purchases and by improving production efficiencies," Wei explained.
Bai added that the increase in sales also made it cheaper for the company to source raw materials through bulk purchases, further driving down production costs.
In 2007, Great Wall Motor sold 107,000 vehicles.
Bai admitted that compared with other mainland automobile makers, Great Wall's production and sales are small.
"Our strategy is not to produce a lot," Bai said. "We want to produce less and place an emphasis on quality and branding, not quantity." Bai said. He said this allows them to increase the prices of their products, boosting the company's profit margins.
Despite the expectation of a global economic slowdown, the export-reliant automobile maker is confident that their profits won't take a hit. "Compared with other international brands, our prices are still 30 to 50 percent lower," Wei said. "This makes us very competitive."
The chairman said the company's long-term goal is to increase its footprint in markets such as Europe and North America.
(HK Edition 03/13/2008 page2)