BYD shares slide as profit miss clouds overseas surge

BYD, China's largest electric-vehicle maker, saw its shares fall on Monday after reporting a 21% decline in first-half net profit to 12.33 billion yuan ($1.8 billion), weighed down by weaker domestic sales, foreign-exchange losses, and a bruising price war at home.Yahoo! Finance+1

Revenue for the six months ended June 30 fell 7.1% year-on-year to 344.82 billion yuan, while earnings per share dropped to 1.35 yuan from 1.71 yuan a year earlier, according to results released on August 29. The company said its new energy vehicle business faced softer demand in China, where competition from rivals including Geely and Xiaomi has intensified.wsj+2

Q2 Recovery Falls Short of Expectations

Beneath the grim first-half headline, BYD's second quarter offered a partial rebound. Net profit rose 30% year-on-year to 8.2 billion yuan, snapping four consecutive quarters of declines. But the recovery missed analyst expectations: Morgan Stanley ↗ 0.26%, UBS ↘ 0.54%, Citi Citigroup Inc. ↘ 0.30%, and Deutsche Bank ↘ 0.55% had collectively projected roughly 48% growth.ad-hoc-news+1

Revenue in the quarter slipped 3.2% to 194.6 billion yuan, marking a fourth straight period of top-line contraction. Chairman Wang Chuanfu attributed part of the shortfall to supply constraints as BYD ramps up production of its second-generation Blade Battery.carnewschina+1

Overseas Engine Powers Margins

The company's international business has become its primary growth driver. Overseas deliveries jumped roughly 68% in the first half to 792,000 vehicles, and for the first time, international revenue surpassed domestic sales, accounting for 52.6% of group revenue. Gross margin improved to 18.85% for the half, with the export arm reaching 22%.biz.chosun+1

BYD is expanding production capacity in Hungary to sidestep European Union tariffs on Chinese EVs, while a planned Turkish factory has been paused to concentrate resources on the Hungarian site, according to Reuters. Battery-electric registrations for BYD in Europe surged 221.8% year-on-year in July, lifting its market share to 2%.ad-hoc-news

Domestic Pressure Lingers

The gap between the export-driven profit recovery and the overall first-half decline underscores BYD's central challenge: whether its overseas momentum can offset a grinding domestic price war. Wang earlier this year warned of a "fever peak" in China's auto market and what he described as a ruthless knockout phase. Hyundai Motor has responded by targeting an additional 3-percentage-point cut to its cost-of-sales ratio by 2030.biz.chosun+1