(Yicai Global) Aug. 28 -- SAIC Group, China's largest carmaker, reported a 39 percent drop in first-half net profit from a year earlier, despite a strong rebound in the second quarter, after the auto industry shut down because of the Covid-19 pandemic. Its shares slid.

Net profit was CNY8.4 billion (USD1.2 billion) in the six months ended June, the Shanghai-based company said in an earnings report yesterday. Revenue fell 24.6 percent to CNY283.7 billion (USD41.3 billion).

Vehicle production and sales slowed in China as manufacturing plants and showrooms closed and buyers stayed at home because of the contagion. But a recovery got underway in the second quarter, according to SAIC, which is the Chinese partner of Volkswagen and General Motors.

"Its various gauges point to improvements in the second half, though the impact of the pandemic is quite clear," said one analyst, adding that electrification and development of its Chinese brand will remain the company's focus.

SAIC has continued its transformation in the electrification, intelligent connection and sharing-oriented sectors, investing nearly CNY6 billion in the first half to achieve new energy vehicle sales of 58,000. It also sold nearly 132,000 NEVs overseas.

Shares of SAIC Group [SHA: 600104] closed 1.4 percent lower today at CNY18.90 (USD2.80) each, after falling as much as 2.9 percent earlier in trading.

In the second quarter, SAIC's profit was CNY7.3 billion, up 32 percent from a year earlier and more than five times that of the prior quarter. Revenue edged 1 percent higher to CNY177.8 billion.

Strong second-quarter growth provided adequate guarantees to cope with uncertainties such as continuing adjustments in the auto market and the novel coronavirus outbreak, SAIC said.

First-half vehicle sales in China dropped 17.2 percent to about 10.2 million. SAIC sold about 2 million, down 30.2 percent.

Joint venture SAIC-Volkswagen contributed CNY6.9 billion to net profit, while SAIC-GM accounted for about CNY1.8 billion. Another JV, SAIC-GM-Wuling, lost CNY629 million on revenue of CNY25.5 billion.

Editor: Peter Thomas