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Geely profit doubles on SUV sales

[BEIJING] Geely Automobile Holdings Ltd, the best-performing stock on the Hang Seng Index, said it will introduce the first models built on a new platform developed with Volvo Cars later this year as it reported first-half profit more than doubled on stronger-than-expected demand.

Net income climbed 128 per cent to US$650 million in the first six months, beating the average analyst estimate, according to the Hangzhou, China-based carmaker's filing to the Hong Kong stock exchange. Vehicle sales rose 89 per cent in the first six months to 530,627 units. The company last month increased its full-year delivery target by 10 percent to 1.1 million units.

"So far in 2017, the Group's performance has exceeded management's original expectations despite a generally weaker market in China during the same period," the company said in its filing. "This, together with a strong new products pipeline ahead should put the Group in a good position to secure higher market share in the China market." Geely's shares have increased 157 per cent this year to US$21.8 billion, giving the automaker a bigger market valuation than Fiat Chrysler Automobiles NV and Peugeot SA. The second-best performer on the Hang Seng Index this year is Tencent Holdings Ltd, which runs the Wechat social platform with around 900 million active users.

The automaker's dependence on sedan sales declined from 69 per cent in 2016 to 55 per cent in the first half of 2017. More new SUV models are scheduled to go on sale later this year, which will enable the company to tap on the faster growth rate in SUV demand in China, it said.