BYD shares tumble on Q3 outlook


Shares of Chinese automobile and battery maker BYD (BYDDF.PK -10.1%) tumbled after the company announced 1H results yesterday. With the results came an anemic Q3 net income forecast of RMB3M-RMB50M.

Car sales were up 25% Y/Y in H1 to 250K units, but the vast majority were gasoline-powered vehicles. Citi's Paul Gong expects BYD to deliver only 2.1K all-electric vehicles in 2013. Ironically, investors hope profits from gas vehicles will be funneled into BYD's green technologies, like electric vehicles and buses as well as solar panels.

BYD has set its sights on overseas markets for its electric vehicles. It won a contract to supply 35 K9 electric buses to Long Beach and Los Angeles earlier this year. But skeptics abound. A local analyst: "Unlike the domestic market, which can be easily influenced by government policies, the attraction of BYD’s electric buses still need to be tested."

The stock is up 30.7% YTD.

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