BYD Sputters Back to Life 比亚迪新车型助其重整旗鼓
After seeing its business tumble starting in the second half of 2010 and through much of last year, former high-flying car maker BYD (HKEx: 1211; Shenzhen: 002594) may finally be seeing its business stabilize and even bounce back a little as it returns to basics by developing popular new models even as it pushes ahead with its ambitious green car program. The Warren Buffett-backed company has just released preliminary full-year results that, while difficult to interpret too deeply, appear to show the company is back on a growth track after more than a year of falling revenue and plunging profits that nearly saw it fall into the loss column. (earnings announcement) According to the results, the company’s full-year revenue was essentially flat, while its profit dipped 44 percent. Those numbers don’t sound too exciting on the surface, but they mark a huge improvement over the company’s results for the first half of last year, which saw revenue drop 11 percent and profit plunge 88 percent. So the latest numbers seem to indicate that BYD is once again posting healthy double-digit revenue growth and that profits may also soon return to the growth track. Of course, it’s not difficult to post both revenue and profit growth when you’re comparing your latest numbers to very weak year-ago ones, which is the case for BYD. But at least worried investors should be slightly encouraged by the results, which appear to show a bounce-back after BYD rolled out some much-needed new models last year to replace its fast-fading F3, once one of China’s top selling cars that later ran out of gas. (previous post) BYD is putting big hopes in particular on its S6, an SUV co-developed with Germany’s Daimler, that may have posted a record 16,000 unit sales in January, accounting for more than half of its sales for the month after its launch less than a year ago. I do find it a bit ironic that BYD is relying on gas-guzzling SUVs to revive its fortunes, since it loves to tell the world how its future lies in energy saving green vehicles that it is strongly promoting but which so far have only found customers from mostly government buyers trying out the technology on a trial basis. But when you’re struggling to survive, you can’t afford to be too selective about how you do it. In the meantime, investors do seem to be excited about this early reversal of fortune, bidding up BYD’s Hong Kong shares by nearly 50 percent this year — though its price is still well below the highs it reached after Buffett originally invested in the company.
Bottom line: BYD is showing early signs of a rebound after a year of plummeting sales and profits, but needs to keep developing more new models to keep the comeback alive.
Related postings 相关文章:
◙ Car Sales: Domestics Down, But Not Out 汽车销量：国产车下降，接近拐点
◙ BYD’s New EV Plan: Hook Them With Investment 比亚迪拉美电动车之路堪忧
