Shares of Chinese electric-vehicle giant BYD fell nearly 5% in Hong Kong on Monday, a day after the company released interim results that showed intensifying competition and sluggish domestic demand weighing on profitability.
The stock drop followed Friday’s earnings report, which revealed a 20.5% decline in first-half net profit attributable to shareholders, to 12.3 billion yuan, even as revenue fell 7.1% year on year to 344.8 billion yuan, according to the company.
In the second quarter, net profit rose 30% from a year earlier to 8.2 billion yuan ($1.2 billion), though revenue slipped 3% year on year to 194.6 billion yuan, according to a note from Citi following the results.
BYD attributed the profit squeeze to what it described as “sluggish domestic demand and robust export growth” in China’s auto industry during the first half. The company also cited fierce competition and rising costs for commodities, raw materials and chips as factors that pressured automakers’ margins.
Export strength, premium brand gains
Despite the domestic headwinds, BYD’s overseas business remained a bright spot. Exports rose 67.8% year on year to 792,000 vehicles in the first half, the company said.
In China, combined sales across its premium brands — FANGCHENGBAO, Denza and Yangwang — grew 61% year on year, accounting for 12.8% of the group’s total passenger vehicle sales, even as competition intensified and domestic demand faced temporary challenges.
The mixed performance underscores the broader pressure on China’s EV makers, many of which have been forced to cut prices to defend market share in a crowded field.
Outlook
Citi projects BYD’s third-quarter core earnings will reach 13.5 billion yuan, with full-year net profit expected at 41.2 billion yuan — potentially coming in about 8% above consensus estimates.
Investors will be watching whether BYD can sustain its export momentum and premium-brand traction amid persistent pricing pressure at home.
Source: www.cnbc.com — https://www.cnbc.com/2026/08/31/byd-shares-slide-as-fierce-china-competition-dents-first-half-earnings.html
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