(Yicai) April 11 -- Shares in Changan Automobile advanced today after the Chinese car giant projected a rebound in profit in the first three months, after a sharp drop last year, thanks to stronger electric vehicle sales and growing demand in overseas markets.

Changan Auto’s share price [SHE:000625] closed up 0.9 percent at CNY12.31 (USD1.70), giving the company a market capitalization of CNY122 billion (USD16.7 billion).

Changan Auto is anticipating net profit of between CNY1.3 billion ((USD177.6 million) and CNY1.4 billion (USD191.2 million) in the three months ended March 31, the Chongqing-based automaker said today. This represents a between 12 percent and 21 percent jump from the year before.

It marks a big improvement from last year, when Changan Auto’s net profit plunged 35 percent year on year to CNY7.3 billion (USD1 billion), weighed down by losses at its electric vehicle subsidiary Avatr Technology, according to the 2024 financial report released yesterday. Revenue climbed 6 percent to CNY159.7 billion (USD21.8 billion).

Avatr racked up net losses of CNY4 billion (USD547.7 million) last year, while another electric car unit, Deepal, lost CNY1.6 billion. However, Changan Ford, its joint venture with US automaker Ford, turned a profit of CNY2.1 billion.

Although Avatr released a number of new models last year, which boosted sales, the firm poured a lot of money into research and development, marketing and expanding its sales network which led to the heavy losses, the report said.

Changan Auto’s vehicle sales climbed 5 percent in 2024 from the year before to 2.7 million units, marking its fifth straight year of growth and reaching a seven-year high. New energy vehicle sales surged 53 percent to 735,000 autos, while overseas sales jumped 50 percent to 536,000 units.

Changan Auto is taking a number of steps to speed up its transformation, such as spinning off Avatr and preparing it for an independent listing. Last December, Avatr raised CNY11 billion (USD1.5 billion) in a Series C funding round and the IPO is planned for 2026, the parent firm said.

Changan Auto is also deepening its ties with tech giant Huawei Technologies on smart driving tech. In August last year, Avatr paid CNY11.5 billion (USD1.6 billion) for a 10 percent stake in Shenzhen-based Huawei’s intelligent driving arm Yinwang Intelligent Technology.

There has also been a shake-up at the top. Changan Auto said in a separate announcement today that Director and President Wang Jun has resigned. His successor has yet to be announced.

Editor: Kim Taylor