BYD's revenue growth in the third quarter was primarily due to increases in its automotive and cell phone businesses.
(Graphic by CnEVPost)
BYD's revenue continued to grow in the third quarter compared to the same period last year, but net profit fell as it did in the previous quarter.
The company's revenue in the third quarter rose 21.98 percent year-on-year to RMB 54.31 billion ($8.49 billion), mainly due to increases in its automotive and cell phone businesses, according to unaudited financial results it announced today.
BYD's net profit in the third quarter fell 27.48 percent year-on-year to RMB 1.27 billion, although this was still higher than the RMB 237 million in the first quarter and the RMB 936 million in the second quarter.
BYD's gross margin was 13.33 percent in the third quarter, down from 22.32 percent in the same period last year, but up from 12.59 percent in the first quarter and 12.90 percent in the second quarter.
BYD's selling expenses continued an upward trend so far this year, reaching RMB1.61 billion in the third quarter, up 5.51 percent year-on-year. This is compared with RMB1.25 billion in the first quarter and RMB1.41 billion in the second quarter.
The company's R&D expenses reached RMB 2.24 billion in the third quarter, down 5.41 percent year-over-year, but higher than the RMB 1.22 billion in the first quarter and the RMB 1.72 billion in the second quarter.
BYD is now at the end of its product mix transition to new energy vehicles, and while it still has fuel vehicles on sale, they already account for only a fraction of the new energy vehicles.
The company sold 80,114 units of all vehicles in September, up 90 percent from a year earlier.
Of those vehicles, 71,099 were new energy vehicles, accounting for 89 percent of the total. This includes 70,022 passenger cars, and 1,077 commercial vehicles.
Among new energy passenger vehicles, BYD sold 36,306 pure electric vehicles in September, up 197 percent from 12,212 units a year earlier. Its plug-in hybrids sold 33,716 units in September, up 428 percent from 6,391 units a year earlier.
As China's new-energy vehicle subsidies decline from 2021 to 2023 and will be completely withdrawn by 2023, some investors were worried that the decline in profitability of new energy vehicles would be a drag on BYD's overall performance during its transformation process.
However, Shanghai Securities said in a report last week that BYD is well prepared in the pure electric and plug-in hybrid technology routes and will hedge the impact of subsidy withdrawal through cost reduction, scale effect, and potential point value.