An auto-maker that suffered huge losses just nine months ago is expected to turn losses into profits in its next financial report.
On October 14, Changan Auto disclosed its performance forecast for the first three quarters of 2020 on October 14 2020. According to the report, as of September 30 this year, the Chinese state-owned automobile manufacturer is expected to turn losses into profits.
In the first three quarters of this year, Changan Automobile's net profit attributable to shareholders is expected to be between CNY 3.20 billion-3.80 billion, a year-on-year increase of 220.23 -242.78%. Basic earnings per share are CNY 0.67 to CNY 0.79, compared with the same period last year, Changan lost CNY 2.66 billion.
For 3Q,2020, the firm is expected to achieve a net profit of CNY 598 million to CNY 198 million, up 241.84% to 384.20% year-on-year, compared to a loss of CNY 421 million in the same period last year.
The turnaround in the net profit should be mainly thanks to the increase in company's auto sales, the optimization in product structure and the improvement in the profitability of its self-owned and joint-venture businesses, said Changan Auto.
The automaker also announced non-recurring items brought nearly CNY 5.6 billion to the 1Q-3Q net profit attributable to shareholders.
With 205,543 vehicles sold, Changan Auto reported a 28.65% year-on-year leap in September sales, achieving growth for six consecutive months.
Huachuang Securities predicts that Changan Auto's 2020-2022 net profit is expected to be CNY 5.70 billion, 6 billion, and 7.2 billion, respectively, maintaining a strong 'Buy' rating. Pacific Securities reported that in 3Q, the passenger car industry has stabilized and Changan Auto's 2020 and 2021 net profits are expected to be CNY 4 billion and 6 billion, respectively.