(Yicai Global) Aug 22 -- Shares of BYD tumbled after China's biggest manufacturer of electric vehicles forecast slowing profit growth for the first three quarters of this year amid a deep slump in the world's largest autos market and cuts in government subsidies for new energy vehicles.

BYD's stock price fell 2.7 percent to close at CNY50.21 (USD7.09) in Shenzhen [SHE:002594] and slumped 6.6 percent to HKD40.35 (USD5.15) in Hong Kong [HKG:1211].

Net profit may increase between 1.8 percent to CNY15.55 billion (USD2.19 billion) and 14.9 percent to CNY17.55 billion in the nine months ending September, the Shenzhen-based company said in an earnings report yesterday.

Auto sales in China fell 5.3 percent last month, according to the China Passenger Car Association. It was the 13th month that sales had fallen over a 14-month period. The slump is taking a toll on carmakers along with the phasing out of state subsidies that helped to spur robust growth in China's NEV market. Last month, NEV sales dropped for the first time in more than two years. 

For the first half of this year, BYD's net profit gained threefold from a year earlier to CNY1.5 billion on a 15 percent jump in revenue to CNY62.2 billion thanks to its NEV and smartphone parts businesses, the firm's earnings report said.

Auto sales contributed revenue of CNY33.98 billion, up 16.3 percent. BYD sold 228,100 vehicles in the first half, up 1.6 percent, of which 145,700 were NEVs, up 94.5 percent. That outpaced the NEV market's 50 percent growth rate. The firm's market share rose from last year's one-fifth to nearly a quarter this year.

BYD's handset components and assembly business took in CNY23.3 billion in a 14.4 percent annual jump. The world's second-largest cellphone original equipment manufacturer, BYD's mobile phone business is booming as Chinese telecom equipment and smartphone giant Huawei Technologies' main foundry.

BYD Electronics, BYD's handset OEM unit, will attain revenue of more than CNY100 billion in the three business areas of mobile phones and notebooks, new intelligent products, and smart car systems in the next five to 10 years, Wang Nianqiang, BYD's cofounder and BYD Electronics' chief executive, told Yicai Global.

Formed in 1995, BYD produces automobiles, electric bicycles, buses and forklifts, and rechargeable batteries. It has two main units, BYD Automobile and BYD Electronic.

Editor: Ben Armour