BYD's net profit rose 28% in the third quarter as the world's top electric-vehicle seller pushed ahead with its overseas expansion to offset slowing demand in its home market of China.
The Shenzhen-based automaker said Thursday that net profit was 10.02 billion yuan, equivalent to $1.50 billion, up from 7.82 billion yuan a year earlier. Revenue increased 14% to 221.49 billion yuan.
The results fell short market expectations. Analysts polled by Visible Alpha had estimated net profit of 11.10 billion yuan on revenue of 240.83 billion yuan for the quarter.
For the nine months ended September, net profit fell 4.2% to 22.34 billion yuan, while revenue was flat at 566.30 billion yuan, the company said.
BYD's earnings underscore the challenges Chinese carmakers face in the world's largest auto market. Like many of its peers, China's leading EV maker has looked abroad for growth as it struggles with slowing sales and increased domestic competition.
Overseas sales continued to drive growth at BYD in the latest quarter, accounting for more than 40% of total sales. The company exported over 550,700 new-energy vehicles--a category that includes full EVs and plug-in hybrids--during the period, more than double the year-ago figure. Total vehicle sales, meanwhile, grew by a much slower 19% to 1.3 million units.
Analysts say BYD's overseas expansion will become increasingly important as Chinese demand slows further. However, its ability to sustain growth overseas will depend on how effectively the company can navigate rising trade barriers and build local production capacity in key markets, they said.
For now, the odds are in BYD's favor. Its new plant in Hungary is expected to begin production soon, giving the company an additional manufacturing base in Europe as the European Union moves to curb imports of Chinese-made hybrid vehicles.
There are also some positive signs in China. Demand for its latest fast-charging models remains strong in the Chinese market and deliveries are likely to accelerate in the coming months as battery supply constraints ease, Bernstein analysts wrote in a note.
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