On November 29, Jianghuai Automotive revealed that its project with a total investment of 837 million yuan for heavy-duty trucks was reviewed by the National Development and Reform Commission.

Earlier, it was reported that Jianghuai Automobile is brewing a truck project with a total investment of nearly 1 billion yuan and has already obtained state approval.

Jianghuai Automobile said yesterday that the total investment for this project is actually 837 million yuan. According to the plan, Jianghuai hopes to build a project with an annual output of 40,000 heavy-duty trucks, of which fixed-asset investment is 647 million yuan and circulating capital is 190 million yuan.

Jianghuai also estimated investment income for the first time. According to reports, the company commissioned Dongfeng Design and Research Institute Co., Ltd. to report to the National Development and Reform Commission that the project is expected to reach a production period of 6 years. After the project reaches production, the company can realize an annual average sales income of 4.48 billion yuan, and achieve an average annual profit. A total of 334 million yuan, to achieve an average annual profit after tax of 224 million yuan.

Wang Deian, an analyst from Guolian Securities Automotive Industry Co., Ltd., introduced the report. JAC's aiming at medium-heavy trucks began in April 2005. “Before it was mainly the passenger car chassis and light trucks, so Jianghuai was only a latecomer in the heavy truck.”

Regarding the impact of the project on JAC's share price, Wang Dean said: “There is no impact on the whole.” She analyzed that the project’s total investment is 800 million yuan, which is not significant in the medium and heavy truck industry. Moreover, the project will take 6 years to reach production.

Wang Dean said that JAC has a new perspective on the estimation of earnings. It is reported that the operating income data and net profit data circulated in the securities industry previously did not conform to this announcement. For example, if the sales income was adjusted from RMB 6 billion to RMB 4.48 billion, the net profit was originally estimated to be RMB 400 million.

After a two-day rally, Jianghuai Automobile rose 2.79% with the broader market yesterday and closed at 8.10 yuan.

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