Brilliance China (CBA) in contention for Dorky Press Release of 2005

| About: Brilliance China (BCAHY)
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It's only March, and we have already seen some of the most astounding press releases in recent memory. This past week's entry comes from Chinese automotive company, Brilliance China (ticker: CBA), and is now in contention with China Finance Online's (ticker: JRJC) release of last month, for the Internet Stock Blog's award for Dorky Press Release of 2005. More here:


The beginning is relatively harmless - offering language typical of an earnings pre-announcement:

The Board wishes to inform shareholders of the Company and investors that
due to the significant slowdown in growth in the domestic demand for
automobiles and intensified price competition during the year, the
consolidated results of the Group for the year ended 31st December 2004 will
be principally materially adversely affected by the decreases in sales volume
and a possible provision for impairment of intangible assets.

Then this:

Shareholders of the Company and investors should exercise caution when
dealing in the shares of the Company.

And as if it couldn't get worse, there is this:

As stated in the
interim report of the Group for the six months ended 30th June 2004, the
implementation of macro-economic policies and austerity measures in the PRC
has resulted in a significant slowdown in growth in domestic demand for
automobiles since the second quarter of 2004.

Thought: The company has been experiencing a "significant slowdown" in domestic demand for cars since Q2 2004, and waited almost 9 months to let investors know?

Hey Brilliance China - thanks for the tip!

As investors, we do read the news, and we know that the Chinese government took steps to slow the economy in 2004. We also know what's happened to Chinese car sales over the last 9 months. And in case you had any doubt that we were privy to this information, take a look at your stock price over the last 9 months - it's down - and down a lot! (See chart below.)

Comments:

  • Feel free to take a look at company press releases over the last 9
    months. You will find no word of any slowdown in car sales. You will however find a
    whole slew of press releases relating to management resignations.
    Related to the company's struggles? Maybe.
  • And what is the meaning of the selloff? No numbers are included in the pre-announcement. All we are told is that "as the Group's consolidated results for the year ended 31st December 2004
    have not yet been finalized, the Board is not in a position to quantify
    precisely the extent of the financial impact at this time". Thought: It is somewhat surprising to see such a sharp sell-off on Friday, when the company didn't tell us anything new!

You can access the full press release here.

CBA stock market performance:

Cba320