By Jiahui Huang

Zhongsheng Group's shares, which rallied significantly in past sessions, fell early Tuesday on profit-taking after it confirmed reports of a tie-up with Seres Group to sell the latter's electric vehicles and hybrid cars.

The Chinese automobile dealer halted trading Monday after its shares surged 28%.

The stock was last down 6.0% at 17.80 Hong Kong dollars, equivalent to US$2.29.

The auto dealer said in a filing late Monday that the unusual price move was likely due to reports of its potential partnership with Seres to distribute its electric vehicles and hybrid cars.

Zhongsheng said the agreement with Seres was preliminary and discussions were still on for potential collaboration.

The stock is likely tracking the overall weakness in the Hang Seng Index, CCB International analyst Qu Ke said. There could also be some profit-taking after the shares' recent gains, the analyst said.

While the onshore investors like the theme of Seres partnering with Zhongsheng Group, investors should wait and see the details of the deal, Qu said.

Chinese EV space is getting more competitive as the year-end approaches with automakers keen to reach their annual sales target.

The China Passenger Car Association has said it expects the EV market to see robust demand until year-end as sales of new-energy cars, which includes electric and hybrid vehicles, accounted for 52.9% of all passenger-vehicle sales in October.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

November 11, 2024 22:36 ET (03:36 GMT)

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