Already a Bloomberg.com user?
Sign in with the same account.
(Updates with closing share price in second paragraph.)
July 13 (Bloomberg) -- BYD Co. fell in Shenzhen trading after the Chinese automaker part-owned by Warren Buffett’s Berkshire Hathaway Inc. said first-half profit may have tumbled as much as 95 percent.
BYD dropped 1 percent to 31.19 yuan at the 3 p.m. trading close in Shenzhen. Its shares listed in Hong Kong closed 3 percent higher at HK$23.70 after falling as much as 6.7 percent. The Hong Kong-traded stock has lost 42 percent this year, the biggest decliner on the Hang Seng China Enterprises Index.
Net income for the six months ended June 30 may range from 121.1 million yuan ($19 million) to 363.2 million yuan, dropping from 2.42 billion yuan a year earlier, BYD said in a preliminary earnings statement yesterday. The Shenzhen, southern China-based carmaker, whose vehicle sales fell for 11 straight months through June, said the end of tax incentives for small cars crimped demand.
“BYD car sales dipped as they couldn’t find a car model that sold as well as their best-selling F3,” said Harry Chen, an analyst at Guotai Junan Securities Co. in Shenzhen, referring to China’s top passenger sedan by sales for the past two years. “The new products they introduced were more of a facelift without any technological improvement.”
BYD’s deliveries dropped 8 percent last month to 32,515 vehicles as demand slowed and rivals including General Motors Co. and Nissan Motor Co. introduced new models. The decline in June compared with a 6.2 percent industrywide increase in car deliveries to dealerships, the China Association of Automobile Manufacturers said last week.
Chinese auto sales have climbed at a slower rate this year after surging 32 percent to a record in 2010, as the government phased out incentives and imposed purchase restrictions to curb traffic congestion.
BYD posted an 84 percent decrease in first-quarter profit. The company didn’t say when it will report final first-half earnings.
“There was a decline in automobile sales volume and revenue as a result of cancellation of preferential tax policy on passenger vehicles with emission below 1.6 liters and intensifying market competition,” BYD said in the statement.
The company’s handset component and assembly business also declined because one of its major customers deferred some sales orders, according to the filing.
--Editors: Chua Kong Ho, Lena Lee
To contact the Bloomberg News staff on this story: Liza Lin in Shanghai at email@example.com; Winnie Zhu in Shanghai at firstname.lastname@example.org
To contact the editor responsible for this story: Kae Inoue at email@example.com