GAC loses 21.6b yuan in market value

GAC Group's stock price slumped 10 percent on the Shanghai stock exchange Thursday, with its daily limit hitting a 25-month low for the carmaker, which has joint ventures with international brands including Honda and Toyota.

The sudden free fall, starting around 10:40 am and closing at 21.60 yuan, wiped out 17.49 billion yuan in the carmaker’s market value in China's A-share market alone. Its stock price fell about 4 percent on the same day in Hong Kong, losing a further HK$5.16 billion.

GAC Group, which is headquartered in Guangdong province, said, "There is no change in the company, with our production and operations going normally."

It added that there are no potential issues that could have had major effects on its stock prices.

Two equity analysts, one from the Chinese mainland and the other in Hong Kong, told China Daily that they did not have a clue about the sudden fall and both agreed that GAC Group's overall business is robust.

"Its own brand and electric cars are developing. No news about a sudden recall for its Japanese brands. Its January sales volume could not be so bad as to cause the slump," said the Hong Kong-based analyst, who asked to remain anonymous.

The Securities Times newspaper said such landslides might have something to do with the fact that several of GAC Group's top 10 tradable shareholders are trust programs, which are sometimes oversensitive to overall market fluctuations.

GAC Group is one of the fastest-growing carmakers in China. It sold more than 2 million cars in 2017, up 21.27 percent year-on-year, about five times the industry's average growth rate, and it is reported to have prepared generous bonuses for its employees.

In a filing to the Shanghai stock exchange last month, the carmaker expected its net profits for 2017 to grow by 55 percent to 85 percent year-on-year.

At the Detroit auto show last month, GAC announced that it would enter the US market in 2019.