Shanghai (ZXZC)- Geely Automobile Holdings Limited (called "Geely Auto" or “the Company” for short) announced that it gained 36,819,775,000 yuan ($5,304,525,570) in revenue for the first-half of 2020, posting a year-on-year decrease of 23% mainly due to the lower sales volume and the production disruption caused by the partial lockdown in most areas of China in early 2020.

(Photo source: Geely Auto's WeChat account)

During the same period, the profit attributable to the equity holders slumped 43% from a year ago to 2,296,753,000 yuan ($330,887,003).

Due to higher discounts and incentives offered by Geely Automobile and its subsidiaries (collectively called “the Group”) to its dealers under the stagnant auto market in China since mid-2019, the Group's average ex-factory selling price fell by around 6% year on year in the first of 2020.

The basic earnings per share for the first six months stood at 0.2473 yuan, versus 0.4439 yuan for the year-ago period. Diluted earnings per share (EPS) were down 44% to 0.247 yuan.

On May 29, 2020, Geely Auto entered into a placing agreement with placing agents, to promote not less than six placees who are independent third parties to the Company to subscribe for 600 million placing shares at the price of HK$10.8 per share. According to the latest financial result, all conditions of the placing agreement were fulfilled and the placing shares were fully subscribed on June 5, 2020 with the gross proceeds amounting to roughly HK$6.48 billion ($836,102,088) and related directly attributable expenses reaching around HK$32,899,000 ($4,244,895).

The Company said the COVID-19 pandemic had resulted in huge political and economic uncertainties globally, posing significant challenges to the Group's business activities and future cash flow. Thus, the share placement was launched to safeguard its financial strength and to further enrich the Group's financial cushion to cope with a possible prolonged disruption to business activities.

Besides, Geely Auto also approved in mid-June a preliminary proposal for the possible issue of RMB shares and listing on the Science and Technology Innovations Board. The relevant shareholders' approval was obtained at an extraordinary general meeting held at the end of July.

Geely Auto's financial results were below the management's expectations as the sales performance of the Group in the first half of 2020 was adversely affected by the outbreak of COVID-19 pandemic.

The Group sold a total of 530,446 new vehicles (including the sales volume of Lynk & Co vehicles) in the first six months, representing a 19% year-on-year decline. Of those, 510,873 units (-17%) were sold in domestic market and 19,573 units (-49%) were exported to overseas markets.

Because the sales recovery has so far been slower than expected and near-term uncertainties remain in the global macro environment, the Group therefore decided to trim down its 2020 full-year sales target by around 6% from 1.41 million units to 1.32 million units.