BYD Co makes rechargeable batteries and cars in Shenzhen in Guangdong province. Founded in February 1995, and listed in Hong Kong in 2002, the origin of the company’s name is uncertain, with some saying it could simply be an acronym based on its Chinese name or from the phrase “build your dreams”. BYD’s profile was raised in 2008 when a unit of billionaire Warren Buffett’s Berkshire Hathaway invested about US$230 million in BYD.
BYD shares close at new high as income doubles
Shares in BYD, the mainland's largest rechargeable battery maker, jumped to its highest since listing five years ago after it said earnings last year more than doubled as it signed up new clients Nokia and Motorola to buy its handset parts.
The stock jumped 8.13 per cent yesterday, the biggest gain in five weeks, closing at HK$35.90. That was the highest close since it debuted on July 31, 2002 at HK$10.95.
BYD, which also manufactures cars, said net profit rose to 1.12 billion yuan last year from 502.8 million yuan in 2005, while turnover doubled to 12.9 billion yuan from 6.5 billion yuan. Gross profit margin fell 1.2 percentage points to 21.2 per cent due to a decline in profit at the battery business.
The Shenzhen-based company said it would spend about 2.5 billion yuan in capital expenditure, compared with 1.5 billion yuan last year.
'We will consider all possible ways to raise funds, including a spin-off and selling A shares in the mainland, but we have not made any decision yet,' said BYD president Wang Chuanfu.
Fuelled by contracts from Motorola and Nokia, BYD made a 901.5 million profit from sales of handset parts such as keypads, camera modules and liquid crystal display screens, up 220 per cent from a year ago.
Turnover of that business grew 169 per cent to 5.14 billion yuan, accounting for 40 per cent of total sales, up from 29 per cent in 2005.
'We also plan to provide handset assembly services,' Mr Wang said.
Sales of batteries rose 16 per cent to 4.5 billion yuan but profit slumped 28 per cent to 411 million yuan because the price of nickel, used to make rechargeable batteries, soared 300 per cent.
Vehicle sales, which accounted for 25 per cent of total sales, jumped 414 per cent to 3.23 billion yuan. Profit was 116 million yuan, compared with a loss of 117 million yuan in 2005.
BYD sold 55,038 cars, a 244 per cent rise from a year ago, including 46,307 units of its own brand F3 model.
'We will enrich our product lines and launch three new models this year, including two models called F6 and F8,' Mr Wang said.
BYD proposed a final dividend of 40 fen, compared with no final dividend a year ago.