BYD Forecasts Sevenfold Jump in Profit on Narrowing Solar Losses
BYD Co. (1211), the Chinese automaker part-owned by Berkshire Hathaway Inc. (BRK/A), forecast full-year profit will surge as much as 619 percent on improved car sales and narrowing losses in its solar-energy business.
BYD expects net income to be 545.1 million yuan ($89 million) to 585.1 million yuan for 2013, the Shenzhen, China-based company said in a statement to the city’s stock exchange yesterday. That compares with the 766 million-yuan median of eight analysts’ estimates compiled by Bloomberg.
Billionaire founder and chairman Wang Chuanfu has predicted a “second takeoff” in 2013 as BYD completes a three-year restructuring. In that time, profit tumbled 97 percent because of losses at its photovoltaic business, a decline in global battery demand and a slump in car deliveries.
The company expects auto sales and profit to increase in the fourth quarter, a traditional peak season for car sales, driven by demand for models including the Speed sedan and S6 SUV, according to its statement. BYD’s handset components and assembly business will remain stable, while favorable government policies and a recovery in global demand will help further narrow losses at the solar business, the company said.
BYD yesterday said third-quarter net income rose 727 percent to 38.2 million yuan. Its Hong Kong-traded shares have climbed 63 percent this year, compared with the 0.8 percent gain in the benchmark Hang Seng Index.
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