Yulon Nissan boosted by China return hopes
CNATAIPEI -- Shares of Yulon Nissan Motor Co., one of Taiwan's leading automakers, got a boost to end at a new high Friday on hopes that its China investments will strengthen profitability, dealers said.
October 19, 2013, 12:42 am TWN
The hopes come from strong sales at China-based Dongfeng Nissan Passenger Vehicle Co., as Yulon Nissan's five subsidiaries in China serve as component suppliers to the car vendor, they said.
Shares of Yulon Nissan rose 2.41 percent to lose at NT$382.00 (US$12.99), with 339,000 shares changing hands on the Taiwan Stock Exchange.
Led by the gains posted by Yulon Nissan, the auto sub-index on the main board closed up 1.91 percent at 331.21 points, while the weighted index finished up 0.79 percent, at 8,441.19 points.
Buying in Yulon Nissan shares was sparked by figures compiled by the China Association of Automobile Manufacturers that showed Dongfeng Nissan sold about 623,600 cars in the China market in the first nine months of this year, market analysts said.
Based on the data, Dongfeng Nissan could possibly hit 870,000-900,000 sales in 2013, up from the 773,000 units sold in 2012, to give it a more than 17 percent share in the Chinese auto market.
Analysts said optimism about Dongfeng Nissan's sales prompted investors in Taiwan to pick up Yulon Nissan shares, with the stock's upward momentum continuing to the end of the session.
They said Yulon Nissan's investments in China, where car sales could top 21 million units this year, have offset the impact of limited growth in Taiwan, where auto sales are expected to reach only 370,000 units in the year.
Investors were already chasing the company's stock in recent sessions on expectations that Yulon Nissan will report more than NT$6 in earnings per share for the third quarter, up from the NT$5.93 EPS of the second quarter, on the launch of new models, analysts said.
Since the beginning of September, the stock has added more than 25 percent on strong foreign institutional interest.
Analysts said the market expects Yulon Nissan to maintain solid sales through the fourth quarter as it prepares the Super Sentra passenger car and other new models this month.