BYD (002594.SZ), (1211.HK) is delivering a fright to its rivals. The Chinese electric-car maker reported record quarterly results on Monday: net profit clocked in at $1.4 billion for the three months ending in September, an increase of more than 80% from the same period a year earlier. The figures are scary for competitors such as Tesla, both in China and beyond.
The world’s largest manufacturer of electric vehicles is revving up research and development, filings showed, with spending rising roughly 130% to $3.4 billion so far this year. It’s also invested in excess of $13 billion to boost production capacity for both cars and batteries. The company founded by Wang Chuanfu is expanding its portfolio of premium brands, adding new models for its flashy Denza marque. And it’s a growing force outside the People’s Republic. Overseas sales accounted for 8.7% of the total in the third quarter, compared with just 3.1% a year ago, Bernstein analysts calculate.
Investors were nonetheless unimpressed. Both BYD’s Shenzhen- and Hong Kong-listed shares fell around 3% on Tuesday morning. Top-line growth of nearly 40% was perhaps a little pedestrian compared to last year’s triple-digit acceleration. For rivals trying to compete with the $95 billion group, though, that’s scant consolation. (By Katrina Hamlin)
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(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
