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China’s BYD boosts profits for the first time in five quarters as exports rise
🇵🇾 Paraguay /Economy & Trade

China’s BYD boosts profits for the first time in five quarters as exports rise

From ABC Color · () Spanish

Translated from Spanish and summarized by DistantNews. Read the original for the full story.

At a glance

Newswire From a news agency New plan
  • BYD’s net profit rose 30% in the second quarter to about 8.24 billion yuan, ending a run of four consecutive quarters of declining earnings.
  • Overseas sales increased 33.9% and accounted for 52.6% of revenue, while sales in China fell 30.7%.
  • Chinese electric-vehicle makers are seeking foreign markets amid weak domestic demand, excess capacity and a prolonged price war, despite tariff barriers in the United States and Europe.

BYD increased its second-quarter profit by 30%, the first time in five quarters that the Chinese electric-vehicle maker avoided a year-on-year decline in earnings. The result came as weak demand in China made overseas markets increasingly important.

The company recorded attributable net profit of about 8.24 billion yuan ($1.225 billion, or 1.058 billion euros) between April and June, according to calculations based on its filing with the Hong Kong Stock Exchange.

Foreign sales climbed 33.9% to the equivalent of $26.947 billion and made up 52.6% of the total. Sales in China, by contrast, plunged 30.7%, helping drive a 7.1% decline in overall operating revenue. The South China Morning Post reported that BYD’s overseas vehicle sales alone jumped 82.5% in the quarter, surpassing 471,000 units.

Despite weak sales in China, BYD’s quarterly profit could support China’s automotive sector. Its overseas sales could increase by taking advantage of its technological and production strengths.

— Ivan LiThe Loyal Wealth Management analyst assessed BYD’s earnings and its prospects in foreign markets.

Ivan Li, an analyst at Loyal Wealth Management, said the quarterly result could support China’s automotive sector and allow manufacturers to expand abroad by using their technological and production strengths. BYD described the market as a period of “deep adjustments and divergence,” marked by subdued domestic demand and strong export growth, and said it would continue to build its overseas momentum.

Chinese electric-vehicle manufacturers face excess capacity, fierce competition and a prolonged price war at home. Companies including BYD, SAIC, Leapmotor and Chery have responded by opening local factories abroad to avoid new tariffs, although critics say some facilities are mainly assembly lines for kits made in China. JPMorgan estimates that net profit per vehicle is about $744 in mainland China, while the figure could be four times higher in foreign markets. Chinese authorities also announced a year-long campaign to improve vehicle safety and quality after the country’s largest-ever recall.

A period of deep adjustments and divergence characterized by subdued domestic demand and strong export growth.

— BYDThe company used this description in its earnings report and said it would continue strengthening its overseas growth momentum.
About this summary

Originally published by ABC Color in Spanish. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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