Shares of Chinese carmaker BYD took a big hit on Wednesday following a gloomy annual report release, predicting a drop in first-quarter net profits of up to 92% from the year before, the Financial Times reports.
BYD, notably favoured by investment guru Warren Buffett and part owned by his Berkshire Hathaway, fell to a three-month low on the Hong Kong stock exchange on the back of the report, sliding as much as 10%.
The downgrading of profit forecasts is due to impending cuts to government subsidies that have previously propped-up new energy vehicle companies.
BYD’s revenue, however, saw a modest increase of 2.4% in 2017, coming to a total of RMB 102.65 billion ($16.4 billion), driven by a 15% rise in vehicle sales. Profit, on the other hand, dropped in 2017 by almost 20% to RMB 4.07 billion.