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China: BYD Falls After Forecasting 95% Profit Plunge: Hong Kong Mover

BYD Co. (1211), the Chinese carmaker partly owned by Warren Buffett’s Berkshire Hathaway Inc. (BRK/A), fell to a two-month low in Hong Kong trading after the company forecast first-quarter profit may slump as much as 95 percent.

BYD fell by as much as 11 percent, the biggest intraday decline since Sept. 26, before closing 4.8 percent lower at HK$19.94 yuan in Hong Kong. The company’s Shenzhen-traded shares gained 1.8 percent, reversing a 3.9 percent decline.

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Visitors look at a BYD Co. Ltd. E6 electric vehicle at the China International Automobile Exhibition in Guangzhou, China. Photographer: Qilai Shen/Bloomberg

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March 26 (Bloomberg) –- Bill Russo, president of Synergistics, talks about the automotive industry in China. He speaks with Rishaad Salamat from Beijing on Bloomberg Television’s “On the Move Asia.” (Source: Bloomberg)

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Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc. Photographer: Tomohiro Ohsumi/Bloomberg
First-quarter net income may plunge 65 percent to 95 percent, the company said in statements to Hong Kong’s stock exchange yesterday. The stock has outpaced gains in the benchmark Hang Seng Index this year on speculation the company is recovering from last year, when profit declined 45 percent.

“I doubt this year will be a turnaround year for BYD,” said Jack Yeung, Hong Kong-based analyst at BNP Paribas SA. (BNP) “There is a lot of competition in the low-end segment of the market.”

BYD derived 48 percent of 2011 sales from automobiles, with 42 percent from handset components and assembly services and the rest from rechargeable batteries, according to its annual report. The company’s net income margin declined to 3 percent last year, compared with 10 percent in 2009.


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