The Chinese owner of Volvo Car Corp said full-year profit at its local automaking unit probably doubled, topping analysts’ estimates and allowing billionaire founder Li Shufu (李書福) to turn his focus to another major acquisition in Sweden.
Net income last year at Geely Automobile Holdings Ltd (吉利汽車) increased “around 100 percent” from 5.11 billion yuan (US$783.5 million at the current exchange rate) in 2016, the Hong Kong-listed unit of Li’s Zhejiang Geely Holding Group Co (浙江吉利) said on Tuesday in an exchange filing.
That would exceed the 9.46 billion yuan average estimate in a Bloomberg survey of 36 analysts.
The maker of Emgrand sedans is among automakers getting a boost in the world’s biggest auto market, where sales rose to a record for a 27th consecutive year.
Geely forecast deliveries will rise 27 percent to 1.58 million units this year after a surge in demand last year, which might place the company as the biggest-selling domestic brand in China, analysts said.
Shares of the company yesterday fell as much as 2.2 percent in Hong Kong after more than tripling last year.
Last month, parent company Zhejiang Geely Holding announced that it would purchase a stake in Swedish truckmaker AB Volvo. The parent already owns the Volvo Car nameplate after buying it from Ford Motor Co.
In 2013, Zhejiang Geely agreed to purchase Manganese Bronze Holdings PLC, rescuing the maker of London’s iconic black taxis after the UK automaker entered administration.
Li is turning his attention to the Swedish company’s heavy vehicles in a bid to bulk up outside China. The stake would mark Hangzhou, China-based Geely’s first foray into the heavy truck segment.
In a New Year message, Li told employees: “2017 has been an extraordinary and memorable year, in which we have taken significant steps forward on several fronts.”
“The brands under Geely Holding Group have made exceptional progress,” he added.
Li started out making refrigerator parts and later turned a bankrupt state-owned manufacturer into China’s biggest privately owned automaker. He cemented his reputation as a savvy dealmaker after reviving Volvo Car in the face of widespread industry skepticism following the purchase from Ford in 2010.
The premium Volvo brand is going to help Geely outperform peers in the future, Bloomberg Intelligence analyst Steve Man said.
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