Shares in electric vehicle (EV) maker BYD slid on Monday after it reported quarterly profit fell for the first time in more than three years, hit hard by a cut-throat price war plaguing China’s car industry.
Net profit at the world’s biggest EV producer tumbled 30% in the second quarter to 6.4bn yuan (R15.78bn) from a year before, it reported. That followed a doubling of profit in the first quarter.
Its Hong Kong and Shenzhen listed shares were down about 5% in morning trade. Its Hong Kong listed stock sank 8% at the open, marking its biggest one day percentage decline since May 26.
Citi analysts said in a client note BYD’s net profit missed a consensus estimate of 7bn yuan (R17.26bn) to 9bn yuan (R22.18bn) and their forecast of 10.3bn yuan (R25.38bn). They noted price cuts had failed to improve sales sufficiently and BYD had paid a 1bn yuan (R2.46bn) special incentive to dealers during the period.
BYD is targeting global sales of 5.5-million cars this year, but at the end of July it had sold only 2.49-million, equal to 45% of its goal. It is set to report August sales later on Monday.
Reuters
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