Because of decreasing sales, BYD Co. had posted a 99% drop in third-quarter profit – its biggest fall in nearly two years in Hong Kong trading. BYD, the Chinese carmaker backed by Warren Buffett, had the second-biggest decline among 982 stocks in the MSCI Asia Pacific Index.
The shares declined 10% to close at HK$51.05, the biggest drop since November 2008, after BYD posted net income of 11.34 million yuan ($1.7 million) for the three months ended Sept. 30.
Galant Ng, an analyst at Taifook Securities Group Co. in Hong Kong, said that profit was “pretty disappointing” and had dropped “well below” the company’s estimations.
Ng said that BYD had declining car sales and higher costs. The drop in profits is just one of the setbacks facing BYD.
It had postponed plans to export electric vehicles to the US and was instructed to surrender seven facilities earlier this month after China's government asserted that they were build illegally.
BYD, considered the fastest-growing automaker in China last year, reduced its 2010 vehicle sales target 25% in August as it struggled to maintain momentum amid higher taxes on small cars.
Bloomberg News calculated this third-quarter profit figure by subtracting six-month earnings from nine-month results disclosed by the company in a statement to the Hong Kong stock exchange. According to the company’s statement, third-quarter sales increased 0.3% from a year earlier to 10.3 billion yuan. [via autonews - sub. required]