Net profit in the first six month of 2022 at BYD, the world’s largest maker of electrics vehicles, tripled amid soaring sales, the company said in a statement at the end of trade in Hong Kong on Monday.
Net profit at the Warren Buffett-backed manufacturer soared by 206% to 3.6 billion yuan, or about $530 million. Revenue jumped by 65.7% to 150.6 billion yuan.
BYD said in July its EV sales in the first six months of the year climbed by 315% year-on-year to 641,350 units; that exceeded Tesla’s deliveries of more than 510,000 vehicles.
BYD’s HK-traded shares have slumped 10.7% in the past month amid worries about China’s economic growth this year. Still, they are up 1% in the past 12 months, compared with a 21% dive in Hong Kong’s benchmark Hang Seng Index. Its market cap of $121 billion is larger than GM and Ford combined; GM shares have lost nearly a fifth of their value in the past year, and Ford’s have gained 19%.
BYD’s competitiveness comes in part from in-house supplies of core components including batteries and selected semiconductors, as well as an early focus on EVs. Headquartered in the southern city of Shenzhen, it also escaped the world of Covid-related lockdowns that hurt rival Tesla further north in Shanghai.
In its mid-year report, the company noted that “China’s macro economy came under the pressure of shrinking demand, supply shock and weakening expectations, which resulted in the weakened consumer confidence, declined prosperity of (the) real estate industry, and underperformed investment.”
“Under the circumstance of complex internal and external environment, the willingness for automobile consumption is insufficient,” the company said. “Thus, the development of Chinese automobile industry has been severely compromised.” BYD also warned a “shortage of chips and the rising price of raw materials are fueling the challenges of the automobile industry.”
BYD’s overall business is more diversified than its rivals – it also makes handset components and photovoltaics. Among its customers are Dell, Apple, Xiaomi and Huawei. Warren Buffett’s Berkshire Hathaway holds a 7.7% stake in BYD, which ranked No. 579 on the Forbes Global 2000 ranking of the world’s top publicly traded companies earlier this year.
BYD Chairman Wang Chuanfu holds a fortune worth $24.3 billion on the Forbes Real-Time Billionaires List today. BYD Vice Chairman Lu Xiangyang, a cousin of Wang who also leads investment firm Youngy Investment Holding, is worth $19.1 billion, and BYD director Xia Zuoquan, who leads investment firm Zhengyuan Capital, is worth $4.4 billion.
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