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 that is plaguing China’s auto industry.
Net profit at the world’s biggest EV producer tumbled 30% in the second quarter to 6.4-billion yuan ($895m) from a year earlier, it reported. That followed a doubling of profit in the first quarter.
Both 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 that BYD’s net profit missed a consensus estimate of 7-billion to 9-billion yuan and their forecast of 10.3-billion yuan. They noted that price cuts had failed to improve sales sufficiently and that BYD had paid a 1-billion yuan special incentive to dealers during the period.
BYD is targeting global sales of 5.5-million cars this year, but at end-July, it has sold just 2.49-million, equal to 45% of its goal. It is set to report August sales later on Monday.
Reuters
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