CIMC Vehicles Group Co. shares in Hong Kong and China surged higher on Tuesday, as investors welcomed the jump in the company’s 2022 profit.
The company’s Hong Kong-traded shares were last up 4.0%, on track for their best one-day gain in nearly a month, while its Shenzhen-traded shares were up 5.1%. Both counters were more than 8% higher in earlier trade.
The rally came after the Chinese maker of semi-trailers posted a 24% increase in its 2022 net profit, beating some analysts’ expectations. The company said the growth was driven by its overseas expansion into emerging markets such as Southeast Asia, Africa and the Middle East, and a better product mix further boosted profitability.
Analysts at Caitong Securities said the growth momentum is likely to be sustained. “Domestic infrastructure spending is recovering, warming up demand for specialty vehicles at home,” they said in a note. “CIMC’s overseas growth trends also look promising.”
“Infrastructure construction activities are likely to significantly pick up this year, supported by substantial project backlogs accumulated last year, as well as decent government investment plans,” said Louis Wong, Director at Phillip Capital Management (Hong Kong). That should underpin an upbeat demand outlook for CIMC’s trailers and speciality vehicles, he added.