BYD net loss in first 3 quarters reaches ¥0.39 billion due to none profit of new energy vehicle

Gasgoo.com (Shanghai November 17) – Recently, BYD has released its report of 3th quarter which shows the operation revenue from Jan. to Sep. is 40,409 billion Yuan, increasing by 4.4% on year-on-year basis. The net profit is 0.389 billion Yuan, declining by 16.38% on year-on-year basis. After calculating non-recurring profit and loss, the loss in first 3 quarters is 0.39 billion Yuan.

The quarterly report shows the net profit belongs to shareholders in 3th quarter is 28,218,000 Yuan, declining by 26.06% on year-on-year basis. The operation profit is 13,693,000,000 Yuan, increasing by 8.13% on year-on-year basis. BYD predicts the profit of whole year might decline by 10% to 22% due to fierce competition of Chinese auto market and less demand of local brands. The main reason is dismal traditional vehicle business, which is the same in first half year.

BYD didn’t release the sales volume in first 9 months but according to the data from LMC, the number is 297,956 by the end of September, declining by 20% on year-on-year basis. The business of BYD new energy vehicles increases rapidly. The sales volume of Qin, which is a hybrid model of BYD, is 9,473 and 2,004 for electric vehicle model E6.

It is analyzed the revenue which new energy vehicles brings for BYD is 2.7 billion Yuan, increasing by more than 10 times. But the traditional vehicles business declines to the growth of 7% due to the influence from foreign brands such as Volkswagen, GM etc. BYD says its net profit in 2014 might be 0.43 billion to 0.5 billion Yuan, which was 0.553 billion last year.

According to BYD staff, the sales volume of BYD new energy vehicles in September was 1,895, increasing by 24% than last month. The sales volume of Qin in September was 1,700, which was 384 more than last month, increasing by 29%. The total sales volume in first 9 months had been 9,473. The sales volume of BYD new energy vehicles in first 9 months reached 11,477, ranking top 1 in the list of Chinese new energy vehicles sales volume.

The new purchasing tax free policy put into effect from 1st September stimulated new energy vehicle market. The original price of Qin is 189,800 to 209,800 Yuan but after deducting the subsidy of 66,500 Yuan and purchasing tax of more than 10,000 Yuan, the price could be as low as 112,800 Yuan. The customers who buy this model in Shanghai could gain a license plate of around 10,000 Yuan for free, which leads to the hot sales of Qin.

Compared to Qin, the sales volume of E6, another electric vehicle, was 200 per month in first 9 months. It is analyzed the price of E6, which is over 300,000 might be too high although its continuous mileage could be 300 kilometers, which is longest among local brands.

It analyzed the increasing business of BYD new energy vehicles hasn’t been turn into profit, which will influence the stock.