/ Industry, News / China: Great Wall sees share drop

China: Great Wall sees share drop

Linked In Share
China: Great Wall sees share drop

China’s biggest sport utility vehicle maker, Great Wall Motor Co. fell the most in more than five years in Hong Kong trading after the company pushed back the debut of its Haval H8 to fix technical deficiencies.

The delay is a setback for billionaire Chairman Wei Jianjun, whose emphasis on discipline and frugality helped Great Wall generate higher operating margins than any listed carmaker in the world. Analysts at Jefferies Group LLC and HSBC Holdings Plc cut their ratings on Great Wall, while Sanford C. Bernstein said the move is indicative of the company’s growing pains.

The stock plunged 12 percent to close at HK$34.45, its biggest decline since November 2008. The company said in a statement late yesterday that it’s pushing back the H8 for three months to fix eight deficiencies ranging from insensitive doorstoppers to low steering resistance.

“Great Wall’s ambitions to move up a league in the auto industry rest on this vehicle, which has already been delayed unofficially in the last year,” Max Warburton, an analyst at Sanford C. Bernstein, said in a report. “The latest and very public delay will not be taken well by the market as it confirms Great Wall is struggling with technology and quality.”

Warburton estimated the delay may cost Great Wall about 500 million yuan ($83 million) in unrealized operating profit and engineering expenses in the near term. For the pessimist, the reputation damage may be longer lasting and the H8 delay may signal the company will need to crank up its research and development spending, he wrote.

The H8 was projected to account for about 10 % of the company’s revenue and gross profit in 2014, according to estimates by Paul Gong, an analyst at Citigroup Inc. Still, the delay has more impact on investor sentiment than on the company’s fundamentals and will likely have “limited impact” on the broker’s 2014 earnings estimate for Great Wall, he wrote.

Great Wall is among a handful of Chinese automakers independent of foreign partners and government, sparing it from having to split profits and endure extra bureaucracy. With the stock surging in the past five years, Wei became Asia’s wealthiest car executive, with his fortune climbing to as high as $9.2 billion.

Via Bloomberg

by Aurel Niculescu (my Google+) - Tuesday, January 14th, 2014 - filed under Industry, News. Image credit: .
Linked In Share
Related Articles
china delay Great H8 Haval wall


Discuss: China: Great Wall sees share drop

Leave a Reply















Inautonews Facebook PageInautonews RSS FeedInautonews TwitterInautonews Youtube Channel

Sign up to receive our email newsletter on your email. It's safe. No spam!

Five amazing facts about the 2015 Dodge Challenger SRT Hellcat
Five amazing facts about the 2015 Dodge Challenger SRT HellcatChrysler is really enjoying a great ride these recent years. They had their sales increased every single time over the past 50 ...
Buick Envision – new images released
Buick Envision – new images releasedNew images with the Buick Envision have been released once more, ahead of the model’s market launch in China which has been set ...
Smart announcing ForFour Edition 1
Smart announcing ForFour Edition 1Daimler has officially announced its plans to offer a new Edition 1 of the recently unveiled Smart ForFour. Playing its cards ...
US: how to keep your car safe from thieves
US: how to keep your car safe from thievesAlthough there are numerous campaigns against it on a nationwide level, grand theft auto remains as popular in real life as in ...
[VIDEO] Lexus NX gets tested by Auto Express
[VIDEO] Lexus NX gets tested by Auto ExpressThe guys from Auto Express have recently went for a spin in Lexus’ newest crossover, the NX, so if you are interested in this ...
Renault Twingo RS spied
Renault Twingo RS spiedThe upcoming pocket rocket coming from the French based automaker Renault, the Twingo RS, has been recently caught on camera by ...
J. David Power III joins the Automotive Hall of Fame
J. David Power III joins the Automotive Hall of FameYou might know his name because of his company – a force to be reckoned with in the automotive industry – as the 83-year-old ...
Ferrari 360 Modena gets crashed in Australia
Ferrari 360 Modena gets crashed in AustraliaAnother Ferrari has been recently crashed in Australia, this time a 360 Modena, while taking part in a drive event. The Ferrari ...
[VIDEO] See Dan Bilzerian drive his Mercedes-Benz G63 AMG 6×6
[VIDEO] See Dan Bilzerian drive his Mercedes-Benz G63 AMG 6×6A new video uploaded on YouTube is showing Dan Bilzerian behind the wheel of his newest ride, the Mercedes-Benz G63 AMG ...
US: GM investigated in 45 states
US: GM investigated in 45 statesThe No.1 US automaker is currently under review by both houses of Congress, faces a criminal probe by the US Justice Department ...
Ferrari 458 Italia gets totaled in Melbourne
Ferrari 458 Italia gets totaled in MelbourneThe Australian city of Melbourne has recently seen a horrific crash which has left a Ferrari 458 Italia in a big pile of metal, ...
Cadillac ATS Shooting Brake rendered
Cadillac ATS Shooting Brake renderedA first rendering showing the Cadillac ATS in a Shooting Brake body style has just hit the web and we have to admit that this ...
Audi R8 gets tuned by mbDESIGN
Audi R8 gets tuned by mbDESIGNThe aftermarket specialists from mbDESIGN have recently taken on the Audi R8, in its V8 version, in order to give it more power ...
US: DOE lab to change the future of cars
US: DOE lab to change the future of carsThe Oak Ridge National Laboratory is the US Department of Energy’s biggest science facility, researching anything from neutron ...
[VIDEO] 2016 Ford Focus RS spied on the Ring
[VIDEO] 2016 Ford Focus RS spied on the RingThe upcoming top of the line version of the new Ford Focus generation, the RS, has been recently caught on camera while it was ...
Read more automotive news


2013 Frankfurt Motor Show Live Images

buick envision 1
Archivnummer: SSPIP39469
Renault Twingo RS 01
audi r8 rbdesign tuning 1
bmw m4 coupe crash france 1
2015 kia soul 1
2014 mini cooper s tuning maxi-tuner 1
2015 mercedes-benz vito 1
dacia duster tuning india 1
2015-hyundai-tucson 1
Comic-Con-Toys
tesla model s crash china 2014 1

More automotive from inautonews
Chrysler is really enjoying a great ride these recent years. They had their sales increased every single time over the past 50 months. Even their market share jumped the most in a year since the Great Recession. And now they created America’s most powerful car. Did you think the revival of the ...
read more
Inautonews Editors Section
PREVIEW – Hungarian GP 2014
PREVIEW – Hungarian GP 2014“The circuit is a decent measure of a car’s mechanical grip, due to the need of having good traction out of many slow corners. In terms of ...
Review – German GP 2014
Review – German GP 2014Taking Rosberg’s easy win out of the picture, the German GP was truly spectacular, full of wheel-to-wheel racing, some of the overtakes backfiring ...
Britain and Germany go to war
Britain and Germany go to war1995, the German Grand Prix at the old Hockenheimring. Damon Hill leads at the end of lap one ahead of Schumacher but loses the car at the first ...

Editors Section
Inautonews Editors Section
2012 Safest Cars list 2011 Safest Cars [Video] 2011 IIHS Safest Cars [Video] 2011 EuroNCAP Safest Cars 2010 Safest Cars [Video]

Latest in Safety US: NHTSA probes older model year Chevrolet ImpalaGeneral Motors seems unable to shed the safety problems that originated with the reveal that 2.6 ... General Motors – 6 new recalls announcedGeneral Motors is continuing to announce new recalls with six separate campaigns which are covering ...
Safety Section