China’s BYD expects quarterly profit to surge as EV sales hit record
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CHINESE electric-vehicle (EV) maker BYD Co expects its third-quarter profit to climb as much as 365 per cent, as the Warren Buffett-backed company aims to sidestep supply-chain snags and capitalise on strong demand.
Net income will be between 5.5 billion yuan (S$1.08 billion) and 5.9 billion yuan, the Shenzhen-based company said Monday (Oct 17), which would be a record. BYD is benefiting from making its own batteries and semiconductors, helping it avoid disruptions that have hurt rivals, including Elon Musk’s Tesla Inc.
Sales volume of new energy vehicles – including EVs and hybrids – also reached record highs, BYD said in a stock exchange filing detailing estimated results for the quarter ending Sep 30. That drove “significant improvement in earnings” and helped relieve “the pressure on earnings brought by the rising prices of upstream raw materials”.
The forecast follows a strong first half of 2022, when BYD’s net income tripled from a year earlier to 3.6 billion yuan, the top end of its preliminary forecast. Still, there is some uncertainty surrounding the company after Buffett’s Berkshire Hathaway Inc. trimmed its stake in the third quarter.
The EV maker is also set to boost net income in the combined three quarters for the year to 9.5 billion yuan, up as much as 289 per cent, according to the filing.
BYD sold 537,164 electric and hybrid cars in the third quarter, 197 per cent higher from a year earlier. The total comfortably beat Tesla, though that company sells only pure EVs.
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The growing demand for EVs is lifting the broader industry. Leading battery maker Contemporary Amperex Technology said on Oct 10 that its third-quarter net income could surge as much as 200 per cent, thanks to booming sales in the automotive industry, while LG Energy Solution Ltd’s operating profit and sales beat expectations on strong demand.
BYD’s Hong Kong-listed shares fell 1 per cent Monday. They are down about 28 per cent this year. BLOOMBERG
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