Electric carmaker BYD buffeted by subsidy cuts
Shenzhen-based firm hit with a 19.5pc crash in net annual profit to US$647.05m last year
BYD, the Chinese electric car maker, was been hit with a 19.5 per cent crash in net annual profit to 4.06 billion yuan (US$647.05 million) last year, after government subsidies were cut on domestic new-energy vehicle sales and market competition intensified.
The Shenzhen-based firm, which is backed by Warren Buffett’s Berkshire Hathaway, said on Wednesday the cuts affected its electric bus sales, particularly, prompting an early 10 per cent drop in its share price in Hong Kong, before shares close down 7.95 per cent at HK$14.82 (US$1.88).
It also warned investors that first-quarter net profit for this year is likely to have stalled between 75.2 and 91.8 per cent from a year ago, to between 50 million and 150 million yuan, again due to the loss of subsidised sales.
Total revenue for 2017 was 102.65 billion yuan, up 2.44 per cent, and gross profit was 17.9 billion yuan, down 5.7 per cent.
China’s Ministry of Finance cut subsidies for lower-range NEV cars in February and for some buses, but raised them for vehicles with higher performance, in the latest round, after other cuts over the past two years.