Guangzhou Automobile Shares Surge After Disclosing Plans for Huawei EV Partnership

Dow Jones2024-12-02

By Jiahui Huang

Guangzhou Automobile Group's shares surged after the Chinese state-owned automaker announced an electric-vehicle partnership with Huawei.

The carmaker's Hong Kong-listed shares jumped 19% to 3.55 Hong Kong dollars, equivalent to 46 U.S. cents, early Monday, on track for their largest one-day gain since March 2009. The Shanghai-listed stock rose 9.95%, making it the top gainer on the CSI 300 Index.

The gains came after the company said Saturday that it will launch a new EV brand with Huawei, leveraging the tech giant's advanced technology and targeting the premium market.

"The shares surge was more like a short squeeze," said CCB International analyst Qu Ke, adding that investors should await more details about the collaboration.

The deal boosted investor sentiment on GAC, which has reported sluggish sales throughout the year and weak third-quarter earnings, analysts say.

GAC's sales of new energy cars, a term in China referring to electric and hybrid vehicles, fell 26% in the first 10 months of this year, according to the company's statement in early November.

GAC's third-quarter revenue fell 22% compared with a year earlier to 28.23 billion yuan, equivalent to $3.90 billion, dragged by weak sales volumes. The carmaker reported a third-quarter net loss of 1.8 billion yuan, swinging from net profit of 1.54 billion yuan a year ago.

The new Huawei partnership will be GAC's fourth EV and hybrid brand, after Aion, Hyptec and Trumpchi.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

December 01, 2024 21:48 ET (02:48 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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