March 14, 2010, 10:54 PM EDT
March 15 (Bloomberg) -- BYD Co., the Chinese carmaker backed by Warren Buffett, gained in Hong Kong trading after more than tripling full-year profit on rising sales.
BYD climbed as much as 2.3 percent to HK$70.50 and traded at HK$70.05 as of 10:11 a.m. local time, compared with a 0.9 percent decline in the Hang Seng Index. Net income for 2009 rose to 3.79 billion yuan ($555 million) from 1.02 billion yuan a year earlier, the Shenzhen-based company said yesterday.
The carmaker boosted sales 47 percent to 39.5 billion yuan as customers took advantage of government incentives to buy its F3 compact cars, last year’s best-selling model in China. BYD, 10 percent owned by Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc., plans to start selling electric and hybrid vehicles in the U.S. this year and in Europe next year.
“BYD’s earnings beat our expectations,” said Ricon Xia, an analyst at Daiwa Institute of Research in Hong Kong. “On top of other factors, effective cost control has contributed to the profit growth.”
The company’s vehicle sales increased 162 percent to 448,397 last year as China’s industrywide auto demand jumped 46 percent to a record.
BYD, a battery maker that entered the automobile market in 2003, teamed up with German luxury-car manufacturer Daimler AG this month to develop and sell electric vehicles in China. It is also expanding into Europe and the U.S. to take advantage of higher demand for alternative-energy cars in developed markets.
The Chinese carmaker signed a separate electric-vehicle agreement in May with Volkswagen AG, Europe’s largest automaker. The two companies plan to cooperate in areas including hybrids and lithium battery-powered electric vehicles.
BYD aims to become the first Chinese company to sell electric cars in western Europe next year with its E6 model and other hybrids. It may eventually design and build cars in Europe, spokesman Paul Lin said March 8.
BYD may start U.S. sales this year, Chairman Wang Chuanfu said in January. The first E6 hatchbacks will arrive in the U.S. late in the year, according to Henry Li, general manager of BYD’s auto export division.
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