(Yicai Global) Feb. 6 -- UK investment giant Schroders has reduced its holdings in Weichai Power, a Chinese manufacturer of diesel engines and parts, and automaker Great Wall Motor, by more than half over the past year, cashing in more than HKD1.5 billion (USD191.1 million), as China’s automotive sector goes electric and sales of fossil fuel-powered vehicles plunge.

Schroders owned 4.9 percent of Weichai Power on Jan. 31 compared with 12.2 percent on March 29 last year, bagging around HKD1.4 billion (USD183.6 million), according to data from the Hong Kong stock exchange.

While the London-based company’s equity in Baoding, northern Hebei province-based Great Wall Motor was just 4.6 percent on Dec. 7, down from 10.5 percent last April. The firm raised about HKD175 million (USD22.3 million) in the latest paring. Once the shareholdings in a company fall to below 5 percent, any further reductions do not need to be disclosed, according to Hong Kong bourse rules.

The whole automotive supply chain is experiencing a downturn and needs time to recover, said a stock market investor, who used to hold a large number of Weichai Power’s shares. When it will next pick up is uncertain.

Sales of heavy-duty trucks in China plunged 57.5 percent in the first three quarters of 2022 from the same period last year, severely impacting the sales of some of Weichai Power’s main products, said Zheng Liansheng, an analyst with Southwest Securities.

As a result, Weichai Power’s net profit for the nine months ended Sept. 30 plummeted 58.9 percent year on year to CNY3.3 billion (USD488.4 million), according to data published by the Weifang, eastern Shandong province-based company.

The release of new car models by Great Wall Motor’s different marques was greatly affected by a shortage of core materials last year, Wang De’an, analyst at Ping An Securities, told Yicai Global. Its high-end brand WEY performed very badly, logging annual sales of 36,381 units, well below target.

Despite this, Beijing-based Great Wall Motor is expecting 2022 net profit to jump 22.1 percent from the year before to CNY8.3 billion (USD1.2 billion).

Weichai Power and Great Wall Motor are not the only stocks to be given the cold shoulder by Schroders recently. On Jan. 31, Schroders also sold off 2.4 million shares in Samsonite International, a US premium luggage manufacturer, for around HKD57.4 million (USD7.3 million), leaving it with a 6.8 percent stake.

And on Dec. 8, Schroders also sold off 962,000 shares in Chinese miner Zijin Mining Group, earning around HKD10.3 million (USD1.3 million). The asset manager still holds 343 million shares in the Longyan, southeastern Fujian province-based company, an almost 6 percent stake.

Editors: Zhang Yushuo, Kim Taylor