Shares in SAIC Motor Co Ltd rose 2.79 percent yesterday after China's largest car maker reported its net profit for last year would be substantially higher than the previous year.

In a filing to the Shanghai Stock Exchange yesterday, SAIC Motor estimated its 2007 earnings at 4.26 billion yuan (US$672.2 million), up from 1.42 billion yuan in 2006. Earnings per share in 2006 was 0.218 yuan. SAIC Motor closed at 26.64 yuan yesterday.

"The soaring profits are a result of enlarged capital and booming car sales," the company said.

The listed arm of Shanghai Automotive Industry Corp sold additional shares to the parent company in 2006 as part of SAIC's back-door listing program. Its total share capital amounts to 6.5 billion yuan.

SAIC, the Chinese partner of General Motors Corp and Volkswagen AG, reported its sales rose 25.8 percent to a record high of 1.69 million units last year, outpacing the industry average growth of 20 percent.

Its passenger car sales climbed 24 percent to 1.13 million, including 500,000 vehicles sold by Shanghai GM and 456,000 units for Shanghai Volkswagen.

The car maker also delivered 16,000 units of its self-developed Roewe 750 model.

In the commercial vehicle segment, sales rose 29 percent to 553,000 units.

In December last year, SAIC Motor formed an agreement with Yuejing Group to acquire the vehicle-making and car-components assets of Yuejing's subsidiary Nanjing Auto.

It will be the largest merger and acquisition in China's auto industry.

In addition to a newly established working panel, three high-profile officers - including Chen Zhixin, the former general manager of Shanghai Volkswagen - have been appointed to facilitate the takeover.

The car maker also won government approval to issue 6.3 billion yuan (US$851 million) of convertible bonds.