Hong Kong-listed shares in BYD, the Chinese carmaker backed by US billionaire Warren Buffett, fell 7% on Wednesday after analysts cut their target prices and earnings forecasts for the company following poor first half results.
Samsung Securities cut its target share price by three-fifths to HK$6.90 from HK$18, Reuters reported.
The brokerage had also lowered its earnings estimates for 2011 and 2012 by over 60%, mainly on lower handset revenue, offsetting higher sales from the auto and battery segments, analyst Steve Man was quoted as saying in a research note.
BYD shares were down 6.9% at HK$15.06 by the midday trading break, recovering from a session low of HK$14.62, the lowest since April 2009, and lagging a 0.81% fall by the blue chip Hang Seng Index.
On Tuesday, BYD tumbled more than 14% after the company reported an 89% plunge in first half earnings and warned of a possible loss in the third quarter.
“The numbers look really really bad,” Yuanta Research analyst Charlene Gu told Reuters.
The stock has lost nearly a quarter of its market value this week, and is down 63% so far this year.
Gu cut her profit forecasts for the company in 2011 to 2013 by between 50 and 60%, based on lower margins in BYD’s auto division and lower average selling prices at its battery division. She said the stock may start to look interesting if it fell further.
“They still have a pretty positive long-term electric vehicle angle,” she said.
Gu maintained a sell rating on the stock and lowered her target price to HK$13.10 from HK$18.80.