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BYD expects Q3 profit to show 'significant' YOY decline amid weakening demand

Chinese electric-car maker BYD Co. Ltd.'s stock closed 6.6% down in Hong Kong on Aug. 22, after the company said it expects third quarter profit to show a "significant" year-over-year decline.

The carmaker, backed by Warren Buffett's Berkshire Hathaway Inc., attributed the outlook to a slowdown in demand in the global automotive sector and Beijing's decision to phase out financial subsidies for the sector.

In the third quarter, BYD expects to enhance its product competitiveness in the traditional fuel vehicles category, despite a "fierce" market.

Profit from the handset components and assembly business is estimated to be pressured by a lower demand and "intense" market competition. The photovoltaic business is anticipated to show recovery, but still suffer losses, BYD said.

For the first nine months to September, the Pingshan, China-based automaker anticipates a 14.93% year-over-year increase in net profit attributable to owners of the parent to 17.55 billion yuan from 15.27 billion yuan in the 2018 period.

In the first half of the year, the company posted a net profit of 1.45 billion yuan, up from 479.1 million yuan a year earlier. BYD attributed the growth to improvement in its assembly and new intelligent product businesses, as well as sales volume growth in new energy vehicle business.

As of Aug. 21, US$1 was equivalent to 7.06 Chinese yuan.