HomeStock MarketChinese electric vehicle manufacturer BYD sees surge in stock price on strong...

Chinese electric vehicle manufacturer BYD sees surge in stock price on strong Q3 profit prediction.

Chinese Tesla Rival BYD Expects Double Net Profit in Q3 on Strong Vehicle Sales

Shares Surge on Positive Forecast

Chinese electric vehicle manufacturer BYD saw a surge in its shares on Wednesday following its announcement that it expects its third-quarter net profit to potentially double. The company attributes this positive forecast to robust vehicle sales and improved margins.

Strong Performance in the Market

Hong Kong-listed shares of BYD jumped almost 7% and became the top performers, while Shenzhen-listed shares rose by 4.3%. Warren Buffett’s Berkshire Hathaway backs BYD, and the company predicts that the quarterly net profit attributable to shareholders will range between 9.55 billion yuan and 11.55 billion yuan. This represents a significant increase of 67% to 102% compared to the same period last year.

- Advertisement -

Impressive Profit Growth

BYD expects its profit for the first nine months of 2023 to range between 20.50 billion yuan and 22.50 billion yuan, reflecting an impressive growth of 120% to 142%. The company attributes its strong profits to robust vehicle sales, with its new energy vehicle sales volume reaching a record high during the quarter. Additionally, better cost controls and an optimization of its business structure have improved margins.

Thriving Electric Vehicle Market

Despite an overall decline in China’s automobile sales this year, the electric vehicle (EV) market has been a bright spot, experiencing significant acceleration in 2023. BYD’s strong profits indicate that it may be winning an ongoing price war in the Chinese EV market, which was triggered by Tesla. The series of price cuts initiated by Tesla led other players to follow suit, impacting company margins.

Expansion Beyond China

BYD is also making efforts to expand beyond its home market by offering its products in Europe, India, and Southeast Asia. As the second-largest EV maker in the world by sales, BYD is trailing just behind Tesla. However, BYD differentiates itself by being more diversified than its competitors. In addition to manufacturing electric vehicles, the company also produces handset components and photovoltaics through its subsidiary, BYD Electronic International Co Ltd.

- Advertisement -

Positive Outlook for BYD Electronic International Co Ltd

BYD Electronic International Co Ltd expects a profit increase of 129% to 152% for the first nine months of 2023, indicating a positive outlook for the subsidiary.

Must Read