BYD tumbles after posting sharp decline in Q3

PUBLISHED : Tuesday, 30 October, 2012, 11:53am
UPDATED : Tuesday, 30 October, 2012, 12:30pm

BYD Co. (1211.HK), the Chinese automaker partly owned by billionaire Warren Buffet, slumped on Tuesday after it posted a sharp decline in net profit for the third quarter.

The stock fell by 5.35 per cent to HK$14.86 as of 11:44 a.m. on Tuesday, compared with a decline of 0.48 per cent of the benchmark Hang Seng Index at the same time. The stock had fallen by as much as 7.01 per cent this morning.

The Shenzhen-based company's third-quarter net profit for the September quarter was 4.6 million yuan, down by 94 per cent from a year earlier. And it expects 2012 earnings to fall by 98 per cent after reporting a sharp decline for the last quarter.

Net income for 2012 could drop to between 27.7 million yuan and 110 million yuan, the automaker said in a filing to the Shenzhen Stock Exchange.

“The automobile business of the Group, despite its recovery benefitted by the launching of new vehicle models, remains exposed to great pressure from market competition,” the company said in a separate filing to the Hong Kong Stock Exchange.

Deutsche Bank Vincent Ha, who rates the stock as “sell” and has a target price of HK$12.6, said in a morning note that its overall vehicle sales momentum and profitability have “no signs of recovery” even with some encouraging new model sales data.