Chinese electric car manufacturer BYD saw profit fall by almost a quarter in the nine months to September but expects sales in the current quarter to grow rapidly.
Net profit dropped 23.8 per cent to 2.79 billion yuan (US$419.46 million) in the period, while operating income edged up 1.6 per cent to 79.93 billion yuan, according to a filing to the stock exchange on Sunday.
“In the fourth quarter, it is expected that the group’s sales of new energy vehicles will continue to grow rapidly as compared with the same period of last year,” it said.
The group’s new vehicle model, the “Song Max”, has been warmly welcomed by the market, which contributed to a rapid recovery in its conventional vehicle business, BYD said.
It forecasts earnings for the full year could be in the range of 404 million yuan to 429 million yuan, down 15 to 20 per cent from 2016, when it reported net profit of 505.2 million yuan.
BYD Electronic (International), the smartphone-components producer subsidiary of BYD Company, says its profit increased 124 per cent to 1.98 billion yuan for the nine months to September.
Turnover rose 9.1 per cent to 28.47 billion yuan for the three quarters, while gross profit jumped 63.5 per cent to 3.22 billion yuan.
On a quarterly basis, BYD’s net profit in the July-September period declined, mainly because of an increase in research and development costs as the group invested in new projects, according to the stock exchange filing.
“The group believes that the research and development and introduction of new products in the third quarter, though affecting the current performance, enhanced the technical advantage and diversified the product portfolio of the group, laying a good foundation for long-term sustainable and rapid growth in future,” it said.
The company said profit had grown significantly in the third quarter as demand for metal parts in smartphone manufacture continued to grow.
Shares of BYD dropped 2.26 per cent to close at HK$69.2 on Friday, while BYD Electronic shares dipped 6.23 per cent to end at HK$20.3.