BYD Co.'s shares are experiencing a significant rebound, with Hong Kong-listed stock up nearly 12% in March, making it one of the top performers on the Hang Seng Tech Index. This surge is largely attributed to an oil shock from the Iran war, which has brightened the outlook for electric vehicle sales. The company's valuation remains well-supported, showing stronger revenue growth than its more mature original equipment manufacturer (OEM) peers and comparable gross profitability, despite trading at a somewhat higher sales multiple.
The company's growth is increasingly driven by its overseas expansion, which is offsetting weaknesses in its domestic Chinese market. In July 2026, BYD sold 419,211 vehicles, marking its strongest month of the year and a third consecutive month of year-over-year growth. Crucially, 179,841 of these vehicles were exported outside China, representing the highest monthly export volume the company has ever achieved. Exports now account for 42.9% of total sales, indicating a shift from a primarily domestic manufacturer to a global exporter. This strategy is proving effective in Europe and Brazil, where BYD is successfully gaining market share, and local production initiatives are expected to solidify this expansion.
Despite the positive export trends, BYD faces challenges in its home market, where domestic sales were down approximately 9% year-over-year in July, though this was the shallowest contraction since the decline began. The price war in China has impacted profitability, with BYD's first-quarter net profit dropping 55% to 4.08 billion yuan ($561 million), its weakest in over three years. Furthermore, the company's ambitious full-year target of 5 million to 5.5 million new energy vehicles appears challenging, as it requires monthly sales of 554,456 vehicles for the remaining five months of the year, significantly higher than July's best-of-year total of 419,211. However, the export target of 1.5 million units for the year is well within reach, with 972,097 units already shipped by July.
