Shares of Great Wall Motor Co. rose sharply in Monday morning trade, after the Chinese auto maker posted an 81% jump in third-quarter profit.
Great Wall Motor’s Hong Kong-listed stock gained as much as 7.8% before paring gains to 7.85 Hong Kong dollars (US$1.0), up 3.8%. The stock is still down 71% so far this year.
The shares outperformed the wider market, with the city’s benchmark Hang Seng Index sliding 4.3%.
Great Wall Motor’s third-quarter net profit increased to 2.56 billion yuan (US$353.4 million), while operating income rose 29% from a year earlier to CNY37.35 billion, it said in a late Friday filing.
The company attributed the upbeat results to an “increase in profitability of car models,” without elaborating further.
Analysts at Jefferies said in a note that Great Wall Motor’s gross profit margin improved 5.2 percentage points from the same period last year to 22.5% thanks to a better product mix, which boosted its average selling prices.
Citing company management comments, the analysts noted the company “acknowledged that chip shortage could be a long term overhang,” partly due to surging chip usage by smart vehicles, while recent U.S. chip curbs mean that it will have to source some chips domestically.
The bank kept its target price on Great Wall Motor at HK$16.60 while maintaining a buy rating.