This article first appeared on GuruFocus.
Sep 2 – BYD Company (BYDDF) saw its stock slide nearly 7% in Hong Kong on Monday after reporting its first quarterly profit decline in more than three years. Net profit fell 30% in the second quarter to 6.4 billion yuan ($895 million), a sharp reversal from the doubling of profit it posted in Q1.
The drop reflects the intensifying price war in China’s electric vehicle market, where automakers have been aggressively cutting prices to hold on to market share.
Despite the earnings setback, BYD’s revenue rose 14% year-over-year to 200 billion yuan, showing resilient demand even as margins tightened. The company set a 2025 target of 5.5 million vehicle sales globally but has delivered only 2.49 million through July, about 45% of that goal. August marked the second straight monthly decline in production, while China sales fell for the fourth month in a row.
Regulators in Beijing have recently urged automakers to pull back from heavy discounting and unsustainable promotions to stabilize the industry.
Investors will be watching whether this policy shift helps BYD and peers recover profitability in the coming quarters.
