Shanghai (ZXZC)- Geely Automobile Holdings Limited (hereinafter referred to as Geely Auto or the Company) said on August 21 that its semi-annual net profit attributable to the Company's equity holders plunged 40% over the previous year to RMB4,009,475,000.

Geely Auto stated that its performance in the first half of 2019 was below the management's expectation. During this period, the automaker sold a total of 651,680 vehicles (including the sales volume of the Lynk & Co-branded vehicles), representing a 15% decline from the year-ago period.

Total revenue (excluding the revenue of the Lynk & Co JV) for the first six months fell 11% to RMB47,558,617,000 as continued product lineup improvement more than counteract the pricing pressure caused by weak demand and fierce market climate.

As of June 2019, China's auto market had been hit by 12th-month-in-a-row downturn. According to the China Association of Automobile Manufacturers (CAAM), total sales volume of PVs for Chinese indigenous brands recorded a 21.7% year-on-year decline for the first half of the year, versus a 14.0% YoY drop in the national PV sales number.

The company's interim report showed that the first-half revenue from the sales of automobiles reached RMB44,979,288,000, sliding 14.83% from the previous year, while the revenue from the sales of auto parts soared 139.25% to RMB2,151,102,000.

Geely Automobile explained that the vehicle sales volume drop during the first two quarters was mainly due to the greater-than-expected decrease in the overall sales volume drop of China's auto market and the Group's (referring to the Company and its subsidiaries) decision to reduce the accumulated inventories of its dealers to get it ready for the possible continuous downturn pressure of the country's vehicle market in the near term.

Nevertheless, the first-half retail sales volume still recorded a mild year-on-year growth, Geely Auto said, adding it plans to launch at least eight new or revamped models in the next 12 months.

Moreover, gross margin ratio for the first half was negatively affected by higher discounts and incentives to clear dealers' inventories ahead of the formal implementation of the China VI emission standard in some regions staring July 2019.

Basic earnings per share (EPS) was down 40% to RMB44.39 cents.