Shares of Chinese electric vehicle maker BYD surged on Wednesday after it said it expects its third-quarter net profit to potentially double on robust vehicle sales and improved margins.
Hong Kong-listed shares (HK:1211) of the firm jumped nearly 7% and were the top performers on the Hang Seng index, while Shenzhen-listed shares (SZ:002594) rose 4.3%.
BYD, which is backed by Warren Buffett’s Berkshire Hathaway (LONDON: BRK), said that quarterly net profit attributable to shareholders is expected in the range of 9.55 billion yuan to 11.55 billion yuan ($1= 7.3021 yuan)- an increase of between 67% and 102% from the same period last year.
Profit in the first nine months of 2023 is expected between 20.50 billion yuan to 22.50 billion yuan- an increase of between 120% and 142%.
The Shenzhen-based firm said that robust vehicle sales were the biggest driver of the stronger profit, with its new energy vehicle sales volume hitting a record high in the quarter.
It also cited better cost controls and a further “optimization of its business structure,” which likely improved margins.
While China’s overall automobile sales have declined this year, EV sales have been a sole bright spot, accelerating sharply so far in 2023.
BYD’s strong profits also indicate that it may be winning an ongoing price war in the Chinese EV market- one that was sparked by Tesla Inc (NASDAQ: TSLA). A series of price cuts by Tesla saw other players also follow suit in a trend that was expected to weigh heavily on company margins.
But BYD is also attempting to move beyond its home market with offerings in Europe, India, and Southeast Asia. The firm is the second-largest EV maker in the world by sales, trailing just behind Tesla.
But BYD is far more diversified than its rivals, with the company also making handset components and photovoltaics through its unit BYD Electronic International Co Ltd (HK:0285).
The unit said in a separate statement that its expects a profit increase of between 129% and 152% for the first nine months of 2023.
Source: https://finance.yahoo.com/news/chinese-tesla-rival-byd-surges-233159737.html
