Reported by: Eric CRWE Newswire Middle East correspondent
BYD Co announced their second quarter profit of 717 million yuan equivalent to $106 million US, their net income for the first six months surged 100 percent to 2.42 billion yuan or earning per share of 1.06 yuan as compared to net income of 1.18 billion yuan for the same period last year. The company’s revenue increased by 50 percent to 24.2 billion yuan for the first half of 2010.
However analyst Jack Yeung from BNP Paribas Securities Asia Ltd commented, “Profit will still see a significant increase in the first half year on year, what I worry about is the second half.”
The Chinese automaker foresees reduction in auto demand due to increasing inflation and slow recovery in economic growth. The company has also revised it sales target by reducing it by 25 percent as it was able to meet only 36 percent of its original full year sales target in the first half of 2010.
BYD Co’s 10 percent share holding is owned by Omaha, Nebraska based Berkshire Hathaway Inc. With backing of Warren Buffet traders anticipate higher profitability from the company but the automotive industry in china is facing tougher times as consumers are losing interest in Domestic cars and their preferences are shifting to more expensive foreign brands.
Jack Yueng further added, “It’s not the year for domestic carmakers such as BYD and Geely. People are switching from domestic cars to JV makers because of the wealth effect. It’s a social status upgrade for them.”
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