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BYD announces new stock buyback and plans more luxury models

BYD announces new stock buyback and plans more luxury models
Signage for BYD Co. on a wheel hub of an electric vehicle at the company's headquarters in Shenzhen, China, on Monday, 15 January 2024. (Photo: Qilai Shen/Bloomberg)

BYD Co. is planning to repurchase more shares, the car manufacturer said in a filing on Sunday, as it seeks to revive a stock price slump resulting in a 15-month low earlier this month.

The Shenzhen-based company also said it aims to ramp up production of more luxury models this year, boosting its credentials beyond just stylish but budget-friendly cars.

The company’s stock market performance has taken a hit as broader fears of a renewed industry price war spooks investors while China’s stock market has tumbled on wider concerns over the country’s economic performance.

BYD and the broader market started to rebound earlier this month on state support. The EV maker’s Hong Kong-listed stock was down 1% in early Monday trading. The company’s shares ahead of Monday’s opening were down 11.4% for the year.

Read More: BYD Shares Fall as Profit Misses Estimates Amid China Price War

The ongoing price war has already shown up in the company’s results. The EV manufacturer guided towards a preliminary 2023 net income of between 29 billion yuan ($4-billion) and 31 billion yuan, short of analysts’ estimates of 31.5 billion yuan.

Record deliveries in the fourth quarter, when BYD overtook Tesla Inc. as the world’s top seller of electric cars, didn’t translate into another bumper profit. Fourth quarter net income will be between 7.2 billion yuan to 9.2 billion yuan, according to Bloomberg calculations, down from the previous quarter’s 10.9 billion yuan.

BYD previously conducted a 1.8 billion yuan A-Share buyback in June 2022. BYD’s A-Shares listed in Shenzhen jumped 2.3% after Chinese stocks resumed trading following the Lunar New Year break before pulling back partially on profit taking.

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