FAST NEWS: CIMC Vehicles Slumps as Pandemic Slams Brakes on Truck Demand

The latest: Container truck manufacturer CIMC Vehicles (Group) Co. Ltd. (1839.HK; 301039.SZ) announced its revenue fell 25.3% to 5.13 billion yuan ($782 million) in this year’s first quarter, while its profit also fell 38.7% to 124 million yuan.

Looking up: The company’s North America revenue jumped 108.8% as demand for semi-trailers continued to rebound in that market with the receding pandemic.

Take Note: The company said continued weakness in China due to Covid-19 disruptions, together with a slowdown in infrastructure construction, led to a decline in the sale of special purpose vehicles in its home market.

Digging Deeper: CIMC Vehicles designs, manufactures and sells a wide range of semi-trailers to customers in China, North America and Europe. Despite widespread disruptions caused by the global pandemic since 2020, China’s quick control of its local outbreaks allowed for smoother development of its logistics industry over the last two years. That allowed CIMC Vehicle to post record revenues for two consecutive years, and attracted international financial giant Citigroup, which took a stake at the end of last July and has subsequently increased that to 6.66% at the time of its most recent disclosure.

Market Reaction: CIMC’s Hong Kong shares fell 2.3% on Wednesday after the quarterly results were announced. They regained some of that on Thursday, closing up 2.3% to HK$4.44 at the midday break. The shares currently still trade at the lower end of their 52-week range.

Translation by Jony Ho

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CIMC Vehicles, Citigroup, Covid-19, Container truck, Semi-trailers