Great Wall Motor’s shares fall by the most in 4 months after plunge in first-half net profit

Shares of Great Wall Motor Co., China’s biggest maker of sports utility vehicles (SUVs), made their biggest intraday decline in four months, after the company’s first-half net profit fell by 49.4 per cent.

The stock fell as much as 7.1 per cent to an intraday low of HK$9.33 in Hong Kong, their lowest level since March 17, and changed hands recently at HK$9.74.

Great Wall’s net income fell to 2.5 billion yuan (US$369.6 million) in the first six months of the year, due to rising expenses and consumer price deflation.

It’s a decline that had been foreseen by Morgan Stanley’s analysts Jack Yeung and Eddy Wang, who had an “Overweight/Cautious” recommendation on the stock.

“Great Wall will likely announce relatively weak results at its interim report, owing to rising expenses and consumer price deflation,” they said in early July.

To attract buyers, the Hebei-based carmaker spent 1 billion yuan in March offering discounts to promote its Haval brand of SUVs.