BYD expects rebound in car sales
BYD expects its car sales to jump more than 10 per cent this year, although overall profit may plunge by up to 95 per cent in the first quarter.
BYD, which also makes handset components and solar products, saw its shares close 4.82 per cent lower at HK$19.94 yesterday. Its poor performance last year - sales in all three businesses fell - and the first-quarter forecast were blamed for the biggest share price drop since March 6.
Chairman Wang Chuanfu said the solar product stream - a major culprit behind the earnings fall - should cease to be a threat after the company used up expensive stocks of raw materials. 'The prices of raw materials have dropped along with the falling price of photovoltaic products and we expect [the solar business] to stop being a burden by the second half of the year after we finish our old stocks,' Wang said.
As for the car-making sector, which contributed 48 per cent of group earnings last year, he expects sales growth to outperform the 10 per cent forecast for the industry this year in light of a reviving market and the launch of new models.
'We will also expand our overseas market. In the second half, we will provide 45 e6 models to Hong Kong's taxi industry,' Wang said. 'We had provided our electric K9 buses to London and Finland for trials and we will also send some to Hong Kong later this year.'
While revenue from the car division rose slightly to 22.14 billion yuan (HK$27.2 billion) last year, following the introduction of more high-end models, sales fell 13.3 per cent to 437,000 units. Wang projected sales could reach 480,000 units this year.
BYD will introduce in June the second generation of its F3 model - a big hit on the mainland since 2009. Its pure electric e6 sedan sold an average of between 100 and 200 units since its debut as a private car in October last year. Sales were also expected to remain strong for its first SUV S6; 60,000 units have been sold since the launch in May last year.
Despite a strong rebound in the fourth quarter, BYD's net profit dived 45.1 per cent to 1.38 billion yuan for the whole of last year.
The contribution from the group's handset components and assembly services slipped 4.85 per cent to 19.56 billion yuan because of the shrinking market share for traditional mobile telephones, which use lithium ion batteries. Wang said the group would secure more orders for smart phones. BYD became a supplier of Apple last year but it declined to disclose the size of orders.
The carmaker is partly owned by Warren Buffett's Berkshire Hathaway.