Denway Motors Ltd., the Chinese joint venture partner of Japan’s Honda Motor, has posted a 37% rise in first-half net profit as sales continued to surge despite slowing growth in the overall Chinese car market.

Reuters said the company, which joined the blue chip Hang Seng Index last week, reported a net profit of $HK924.23 million ($US118.49 million).

Like other China carmakers, Denway faces tougher competition amid aggressive industry expansion and falling prices, Reuters noted but added that Denway is nonetheless the top Hong Kong-listed China auto pick among many investment banks because Guangzhou Honda’s popular models are seen as less vulnerable than others to price wars in China.

In the first six months, Denway’s 47.5%-owned unit, Guangzhou Honda Automotive Co. Ltd. and another subsidiary sold 80,639 vehicles, up 65% from a year earlier thanks to expanded capacity and the allure of the Honda brand in China, the report said.

Guangzhou Honda makes Accord sedans, Fit saloons and multi-purpose Odyssey minivans while Denway’s other subsidiary makes buses, Reuters said.

The company reportedly proposed an interim dividend of HK4 cents per share, double the previous year’s payout.

The Chinese government on Wednesday slashed its car production growth forecast for this year to 18% from 40 percent, or 2.39 million units. Last year, the China car market doubled to roughly 2 million units, Reuters added.