CHINA'S Chongqing Changan Automobile Co yesterday said it plans to spend HK$610 million (US$78.5 million) to buy back its Shenzhen-listed B shares.

The Chinese partner of Japan's Suzuki Motor said it would buy up to 270 million Hong Kong dollar-denominated B shares within six months, representing 25 percent of all its B shares and 5.6 percent of its total shareholding. The carmaker plans to pay not more than HK$3.76 for each share, according to its statement to the Shenzhen Stock Exchange.

Changan said the current price of B shares is clearly at odds with the company's business performance and profitability. "The investment value of the company has been undervalued, bringing negative impact on brand image and not fitting the interests of shareholders," its statement added.

Changan's B shares closed at HK$2.26 on October 14 before it suspended trading, which represented less than half of the market value compared with the 4.39 yuan (68 US cents) for the company's yuan-denominated A shares.

The company's B-share price has declined this year on overseas investor concerns of slowing business growth as the overall Chinese car market cooled.

In the first three quarters of this year, Changan's combined sales fell 6 percent from a year earlier to 1.25 million units due to waning demand for minivans after government vehicle purchase incentive ended. The fall in sales compared with an industry-wide growth of 3 percent during the same period.

The carmaker's net profit tumbled an annual 48 percent from January to September.
 

Source:shanghaidaily