HONG KONG, Jan 14 (Reuters) - Chinese shares listed in Hong Kong hovered around four-month lows on Tuesday, pressured by Great Wall Motor after China's largest sports utility vehicle maker announced a three-month delay in the launch of a new model.
Its H-share listing slumped 12 percent to HK$34.55, while its A-shares sank 3.2 percent. Other Chinese auto makers were buoyed by an order from President Xi Jinping for the military to buy domestic brands.
"This is not their first delay, raising some concerns of a bottleneck in Great Wall Motor's production line. But the risk is worth taking at about HK$30 per share, though, which was why there was a bounce from the day's lows," said Jackson Wong, Tanrich Securities' vice-president for equity sales.
By midday, the China Enterprises Index of the leading offshore Chinese listings in Hong Kong was flat. It was earlier down more than 1 percent at its lowest since Sept. 2.
The Hang Seng Index slipped 0.2 percent to 22,850.9 points, while the CSI300 of the largest Shanghai and Shenzhen A-share listings and the Shanghai Composite Index each climbed 0.6 percent.
Gains lifted both mainland benchmarks off their lowest levels since early August. They had sunk on Monday to their weakest relative strength index (RSI) values since July, suggesting they were at the most technically oversold levels in six months.
The resumption of initial public offerings in the mainland after a halt of more than a year has raised concerns that new listings may divert liquidity at a time of tightening money supply. But a sixth IPO postponement overnight has also raised concerns that regulatory changes have fallen short of expectations.
Losses for Great Wall Motor on Tuesday took its H-shares to its lowest since late July. Now down about 18 percent in 2014, they surged 75 percent in 2013, which was also its fourth-straight annual gain.
Its H-shares are currently trading at 8.9 times forward 12-month earnings, a 2 percent discount to its historic median, according to Thomson Reuters StarMine.
The company's announcement late on Monday will affect at least its sales for one quarter and the launch of another model, the H2, CICC analysts said in a note dated Tuesday. They reduced their 2014 sales volume forecast by 8.2 percent and downgraded their rating on the stock from "buy" to "accumulate".
CICC added, though, that such deferrals are 'quite normal" during the research and development process for the H8, which is China's first domestic SUV high-end model. They believe Great Wall Motor can resolve any problems, pointing to the company's ability to mobilise engineering resources.
The company had said they were delaying the launch of the H8 to resolve eight problems ranging from insensitive door stoppers to low steering resistance.
However, there were gains for FAW Car, which spiked 4.6 percent in Shenzhen. Guangzhou Auto, which closed on Monday at its lowest since August, climbed 3.6 percent in Shanghai.