(Yicai Global) March 28 -- BYD's shares fell after China's biggest electric automaker reported a second straight year of lower earnings as the government eases back on subsidies for new energy vehicles. 

The Shenzhen-based company's stock [SHE:002594] lost 3.6 percent today to close at CNY52.77 (USD7.84). That's the lowest level in two weeks. The benchmark Shenzhen Component Index dipped 0.7 percent. 

BYD's net profit slumped 32 percent to CNY2.8 billion (USD415 million) in 2018 from a year earlier, the company said in an earnings report late yesterday. Operating revenue rose for the sixth consecutive year, jumping 23 percent to CNY130.1 billion. BYD sold 247,811 new energy vehicles last year, an annual increase of more than 90 percent.

The firm is optimistic about its future business performance. For the first quarter of this year, BYD said it is expecting net profit to increase sharply to between CNY700 million and CNY900 million. To control costs, the firm told Yicai Global it will reduce spending on research and development as well as production.

But this week, China halved the average subsidy for electric cars. The government had already scaled back the amount of support it provides the emerging sector last year. These subsidies have underpinned the rapid development of the country's NEV makers such as BYD.

BYD almost doubled its sales in January and February, and sold nearly 43,100 NEVs, according to its own statistics. The company's market share is about 30 percent. It sold 23 percent more cars last year at 500,000 units, nearly half of which were NEVs. 

Editor: Emmi Laine