HONG KONG: Shares in electric vehicle maker BYD slid on Monday after it reported quarterly profit fell for the first time in more than three years, hit hard by a cutthroat price war that is plaguing China's auto industry.
Net profit at the world's biggest EV producer tumbled 30% in the second quarter to 6.4 billion yuan ($895 million) from a year earlier, it reported. That followed a doubling of profit in the first quarter.
Both its Hong Kong-listed shares and Shenzhen-listed shares were down about 5% in morning trade. Its Hong Kong-listed stock sank 8% at the open, marking its biggest one-day percentage decline since May 26.
Citi analysts said in a client note that BYD's net profit missed a consensus estimate of 7-9 billion yuan and their forecast of 10.3 billion yuan. They noted that price cuts had failed to improve sales sufficiently and that BYD had paid a 1 billion yuan special incentive to dealers during the period.
BYD is targeting global sales of 5.5 million cars this year, but as of end-July, it has sold just 2.49 million, equal to 45% of its goal. It is set to report August sales later on Monday. - Reuters
