BYD shares slumped 4% in Hong Kong on Tuesday as the electric car maker announced that its earnings for the year would surge but fail to meet analyst estimates. The company stated that its earnings would rise between 74% and 86% above last year’s figure of 16.62 billion renminbi. However, the top end of this guidance range, 31 billion renminbi ($4.4 billion), fell short of the analyst estimate of 31.23 billion renminbi compiled by Visible Alpha.
BYD, in which Warren Buffett’s Berkshire Hathaway has an 8% stake, recorded a record sales volume of 3.02 million vehicles, representing a growth of 62%. Despite the intense competition within the industry, BYD managed to achieve significant improvement in profitability. The company attributed this success to its continuous improvement in brand power, rapid growth in overseas sales volume, expanding scale advantage, and strong cost control capabilities within the industrial chain.
Comparatively, Tesla remains far more profitable, earning $15 billion last year despite selling 1.8 million vehicles.
BYD shares have experienced a decline of 17% this year, although Tesla stock has fared worse with a 23% fall.
Automobiles and related products accounted for approximately 80% of BYD’s revenue in the first half of the year. The remaining portion was largely sourced from its mobile phone businesses.
