(Yicai Global) Aug. 22 -- Chinese carmaker Geely Automobile Holdings has slashed its sales target for 2019 by 10 percent after both profit and revenue slumped in the first half.

The Zhejiang province-based firm now aims to sell 1.36 million vehicles this year instead of 1.51 million, it said in its earnings report yesterday as it announced that first-half profit had crashed 40 percent annually to CNY4 billion (USD million) and revenue had slid 11 percent to CNY47.6 billion

It is hard to say how high demand for passenger vehicles will be in the second half, the company added.

The carmaker only narrowly missed targets, having expected to earn CNY45.9 billion in revenue and a little over CNY4 billion in net profit during the first six months. Investors rallied behind the firm and its share price soared throughout today, rising 5.8 percent to HKD11.68 (USD1.49) as of 1.56 p.m.

It blamed the miss on a sector-wide decline and reduced margins from discounts and other incentives to trim down inventory. Its overall gross margin for the period was down to 17.8 percent from nearly 20.2 percent a year earlier.

China's auto market declined 14 percent on the year in the first half, according to the China Association of Automobile Manufacturers, with sales at solely Chinese firms falling 21.7 percent. Geely fared slightly better than its domestic rivals, shipping 650,000 units worldwide -- a 15 percent decline. Sales in China were down 19 percent at 610,000.

It snared a 6.1 percent share of the market and ranked as the country's fourth biggest carmaker overall, according to a TF Securities report published today. The top manufacturers were all part-foreign joint ventures: FAW-Volkswagen, SAIC-Volkswagen Automobile and SAIC General Motors.

The auto industry was sluggish in the first half but should begin adding inventory again soon as most companies have shifted their old stock, TF added.

Editor: James Boynton