(Yicai Global) Feb. 28 -- China's BYD, the world's largest new energy vehicle maker by sales, expects to post a 31 percent annual fall in profit to CNY2.8 billion (USD419 million) for last year, according to a preliminary earnings report.
Operating revenue rose 23 percent to CNY130 billion (USD19.5 billion) for the year, the Shenzhen-based firm said in a statement. The firm is expected to post full results in March or April.
The rise in revenue was driven by rapid growth in sales of NEVs compared with fuel vehicles. BYD's decision to introduce new electric models and upgrade some existing ones helped the firm to retain its position as global NEV sales champion for a fourth straight year.
NEVs made up close to half of all its auto sales last year, up from a little over-quarter the year before. The firm's total NEV sales more than doubled to 248,000 while those of traditional vehicles fell 7.8 percent to 273,000.
Despite the stability of both its NEV and fuel vehicle businesses, the firm's profitability was hit by fierce competition amid an overall decline in the industry, BYD said.
The firm faced greater pressure to bolster profitability in 2018 amid weakening demand and intensifying competition, which was compounded by widening losses in its photovoltaic business following policy changes, along with higher lending costs.
China's car sales fell for the first time in 28 years in 2018 and have not rebounded so far this year. As a leader in the NEV sector, BYD is likely to face reduced subsidies, leading to even fiercer competition and even greater pressure for growth.
BYD's NEV sales nearly tripled annually to 28,700 last month while those of fuel vehicles fell by over half to 15,300.
The company's share price [SHE:002594] closed 3.1 percent down at CNY54.96 (USD8.23) per share yesterday but was largely unchanged as of today's lunch break.
Editor: William Clegg