(Yicai) Aug. 29 -- Profit growth slowed at Chinese automobile and battery giant BYD in the first half of the year amid cut-throat price competition in the world’s biggest car market.

Net profit rose 24 percent to CNY13.6 billion (USD1.9 billion) in the six months ended June 30, versus a three-fold surge in the year-earlier period, according to the Shenzhen-based firm’s earnings report released yesterday. Revenue rose 16 percent to CNY301.1 billion (USD42.4 billion).

Chinese carmakers, particularly in the new energy vehicle sector, have been offering significant price reductions, financing deals, and extended warranties since early last year to outpace competitors. While that has driven short-term sales, it have also eroded profitability. BYD has cut prices across various models and introduced new, budget-friendly versions.

BYD, which vies with Tesla as the world’s biggest maker of electric vehicles, put its first-half profit gain down to a solid performance at its NEV and handset component and assembly businesses.

The company’s NEV sales jumped 28 percent to 1.6 million units, with more than 203,000 sold overseas, a 174 percent increase, according to data from the China Association of Automobile Manufacturers.

Revenue at BYD’s mobile handset components and assembly business surged 42 percent to CNY72.8 billion, a 4 percentage points rise from a year ago and accounting for 24 percent of total income. Revenue at its automobile and related products business rose 9.3 percent to CNY228.3 billion, making up 76 percent.

Shares of BYD [SHE: 002594] closed 0.8 percent down at CNY234.85 (USD33) apiece in Shenzhen today. The stock has fallen almost 19 percent since the end of last year.

BYD expects overseas deliveries to make up “nearly half” of total sales in the future, Executive Vice President Stella Li told Bloomberg News before the earnings results were published.

As of June 30, BYD had entered 77 overseas markets, including Brazil, Germany, Japan, and Thailand. Its new plants in Uzbekistan and Thailand came on stream in the first half. Meanwhile, the company is preparing to build more overseas factories in Mexico, Türkiye, and Cambodia.

BYD’s cash and cash equivalents plunged 294 percent to CNY54.3 billion in the first half. Net cash flow from operating activities slumped 83 percent to CNY14.2 billion, mainly because of increased expenses for goods and labor. It had about 750,000 employees, with total labor costs accounting for nearly 18 percent of turnover.

Editor: Futura Costaglione