Geely shares fall after disappointing Jan sales

HONG KONG, Feb 15 (Reuters) - Shares in Geely Automobile Holdings Ltd fell as much as 4 percent on Tuesday after the Chinese automaker reported lower-than-expected sales for January.

The stock hit a session low of HK$3.64 before trimming losses to 2.6 percent at HK$3.69 at 0248 GMT, underperforming the blue chip Hang Seng Index, which was off 0.4 percent.

'The January sales data looked a bit disappointing and there is some selling pressure after the stock's rally yesterday,' said Yanta Research auto analyst Johnny Wong.

On Monday, Geely said vehicle sales in January rose 4 percent from a year earlier to 45,634 units, but were down about 18.7 percent from December's record high.

Geely ended up 3.6 percent on Monday before the sales data as auto stocks rose across the board following an upbeat earnings forecast from Great Wall Motor Co Ltd.

Great Wall gained 0.8 percent on Tuesday and Guangzhou Automobile Group Co Ltd was up 1.4 percent.

Brilliance China Automotive Holdings Ltd, a Chinese partner of Bayerische Motoren Werke AG, jumped more than 2 percent after it forecast a net profit for 2010 versus a net loss in 2009.

Bigger rival SAIC Motor Corp Ltd, the largest car maker in China, earlier said that it sold 35 percent more vehicles in January from a year earlier.

SAIC shares have been suspended in Shanghai since Monday amid a news report that it planned to inject assets into its listed subsidiaries as it finalises a plan to float its auto-related operations.

China's auto market, the largest in the world, was expected to slow to single-digit growth this year after rising more than 30 percent in 2010, Wong said.

Rising fuel prices, the removal of government subsidies and tighter rules on new car registrations would temper demand, analysts said.

However, the acquisition of Volvo Car by Geely's parent and the revamping of its product line should position the company to benefit from an auto consumer base that is becoming increasingly sophisticated and savvy, said Samsung Securities auto analyst Steve Man in a recent research report.

(Reporting by Alison Leung; Editing by Chris Lewis)

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