BYD Company Limited (002594)

Equity Research Report　|　Industry: New Energy Vehicles and Automotive Manufacturing　|　Report Date: 2026-10-02　|　Market data as of the 2026-09-30 close

This report was automatically compiled by AI based on publicly available information. It is for reference only and does not constitute investment advice.

Key Conclusion: Second-quarter profitability turned positive and began to recover, but first-half profit remained lower; a recovery in demand is yet to be confirmed

Market data as of the 2026-09-30 close

1. Key Investment Points

• First-half results under pressure, with a recovery beginning in the second quarter: Net profit attributable to shareholders of the parent company fell 20.54% year over year in the first half of 2026. Second-quarter net profit attributable to shareholders of the parent company rose 29.66% year over year, while adjusted net profit rose 51.54%. These recovery signals have not yet reversed the cumulative decline.
• Whether the rebound in sales can translate into profit is the key variable: September sales rose 16.98% year over year, but cumulative sales for the first three quarters were still down 3.94%. Automotive gross margin was 20.49% in 2025; amid price competition, improvements in profitability still need to be confirmed by both sales volume and gross margin.
• Valuation is below the company’s historical median, but earnings delivery remains a prerequisite: The closing price on September 30 was RMB 83.31, with PE-TTM of 25.81x and PB-MRQ of 3.17x. PE was at the 36th percentile over the past approximately 5.2 years, below the median of 30.44x.

Market Expectations and Evidence

• What the market is pricing in: The market implies average annual EPS growth of approximately 14%. Consensus EPS rises from RMB 4.38 in 2026 to RMB 6.81 in 2028, but the available data do not show the consensus growth rate, making it impossible to determine quantitatively whether market expectations are above or below institutional forecasts.
• What the evidence shows: Institutional forecasts point to a recovery in profit, but revenue and net profit attributable to shareholders of the parent company fell 7.13% and 20.54%, respectively, in the first half of 2026. Second-quarter profit turned positive year over year and September sales recovered, indicating initial signs of a rebound. Whether cumulative sales and profitability can improve on a sustained basis remains to be verified in the third-quarter report.

Balance of evidence: Evenly balanced; confidence: High (covered by 36 institutions; market and financial-report figures checked programmatically)

Second-quarter profit and September sales improved, but first-half profit and cumulative sales for the first three quarters remained down, leaving the sustainability of the recovery unconfirmed.

2. Business and Competitiveness

2.1 Business Mix

The company sells new energy vehicles and related products to consumers and through dealer channels, and also provides handset components, assembly, batteries, and other products. It generates revenue through scaled manufacturing and a diversified product mix.

2.2 Competitive Advantages

Strength of competitive advantages: Moderate

• Scale and vertical integration: Vehicle sales reached 4.6024 million units in 2025. The company develops and manufactures its own batteries, motors, electronic control systems, chips, and other products.
• R&D investment: R&D investment was RMB 63.441 billion in 2025, equivalent to 7.89% of revenue and up 17.13% year over year.
• The company’s overall gross margin was 17.74% in 2025, higher than those of Changan Automobile and SAIC Motor, but slightly below that of Great Wall Motor.

Key threats: Price competition and cost pressures have already reduced the gross margin of the automotive business. Vertical integration does not mean that all key components are self-supplied, while overseas expansion also faces tariffs, certification requirements, and localization costs.

2.3 Value-Chain Position and Profitability Trends

• The company manufactures vehicles, batteries, consumer-electronics components, and photovoltaic products. Related inputs include battery materials, metals, and electronic components; the annual report does not break down procurement costs by category.
• Purchases from the top five suppliers accounted for 15.31% of total purchases in 2025, with the largest supplier accounting for 9.74%; supplier names were not disclosed.
• Products reach end customers through direct sales and dealerships; direct sales accounted for 45.67% of revenue in 2025, and dealer sales for 54.33%.
• The main sources of pricing pressure are competition among comparable models, promotions, and channel operations; the annual price-reduction model applied by automakers to component suppliers should not be assumed to apply here.
• The 2025 annual report disclosed that the top five customers accounted for 18.12% of sales and the largest customer for 12.53%. Customer names are anonymized, and only one year of data is available, making it impossible to assess trends in customer concentration.
• Net accounts receivable was RMB 37.005 billion in 2025, equal to 4.60% of revenue and approximately 113.45% of net profit attributable to shareholders of the parent company. The annual report showed 29 days of receivables turnover (35 days in 2024). Year-end accounts payable was RMB 186.742 billion, and customer advances were RMB 50.875 billion.

BYD operates in the midstream of the value chain, manufacturing vehicles and vertically integrating key components. The automotive business had a gross margin of 20.49% in 2025. Profit improvement depends more on cost reductions through scale in key components, realization of profitability from vehicle mix and overseas operations, and easing gross-margin pressure from price competition.

2.4 Industry and Peer Comparison

Competition in new energy vehicles and domestic-brand automobiles continues to center on products, pricing, and scale. BYD’s revenue grew 3.46% in 2025, but overall gross margin and net profit attributable to shareholders of the parent company declined, indicating that scale expansion has not fully offset pressure from pricing, costs, and product mix.

BYD’s 2025 revenue was significantly higher than that of the peer sample. Its overall gross margin was higher than those of Changan and SAIC, and slightly lower than that of Great Wall. However, gross margin and net margin attributable to shareholders of the parent company declined in 2025; one-year cross-company differences are insufficient to establish a long-term advantage.

3. Financial Quality

3.1 Operating Results

The latest reporting period is the first half of 2026; second-quarter standalone data are calculated by subtracting first-quarter results from the six-month report.

Cumulative net profit attributable to shareholders of the parent company remained down in the first half, although the decline in adjusted net profit was smaller. Second-quarter standalone net profit attributable to shareholders of the parent company and adjusted net profit both turned positive year over year, while gross margin improved year over year, indicating a quarterly recovery.

3.2 Financial Health Check

4. Valuation and Market Expectations

4.1 Valuation

Valuation multiples are calculated programmatically based on closing prices on 2026-09-30 (trailing 12-month basis); peer multiples are calculated on the same basis using closing prices on 2026-09-30.

Market-implied expectations: At the current PE of 25.81x, if investors require an annualized return of 8% and assume a PE of 15x in 10 years, EPS would need to grow by approximately 14.0% annually (excluding dividends and on a conservative basis). This can be compared with the institutional forecast growth rates below.

PE-TTM of 25.81x is at the 36th percentile over the past approximately 5.2 years, below the median of 30.44x. PB-MRQ of 3.17x is at the 0th percentile, and PS-TTM of 0.98x is at the 5th percentile. The share price implies average annual EPS growth of approximately 14%; institutional EPS forecasts rise year by year, but an actual recovery in profitability remains to be verified.

4.2 Consensus Estimates

Compiled by iFinD, as of 2026-09-30; net profit coverage: 37/37/36 institutions, with forecast ranges of RMB 34.193–46.022 billion, RMB 38.036–64.630 billion, and RMB 40.145–75.287 billion, respectively.

4.3 Institutional Views

2 institutions; average target price RMB 117.04, range RMB 114.07–120; latest view from CICC on September 10, with a target price of RMB 120.

5. Catalysts and Recent Events

5.1 Key Upcoming Dates

5.2 Recent Important Events

• 2026-10-01 September sales recovered, but cumulative sales remained down (Neutral): September new energy vehicle sales were 463,561 units, up 16.98% year over year and higher than in the previous two months. Cumulative sales for the first three quarters were 3,131,576 units, down 3.94% year over year. Monthly production and sales data are unaudited, and the sales recovery does not yet indicate an improvement in profitability.
• 2026-08-29 Interim report showed year-over-year declines in revenue and profit (Negative): The interim report showed year-over-year declines in revenue and profit, while operating cash flow improved. It remains to be seen whether the sales recovery can translate into improved revenue and profitability.

6. Bull-Bear Debate and Risks

6.1 Bullish Arguments

• Vertical integration and R&D support long-term cost reductions: R&D investment reached RMB 63.441 billion in 2025, up 17.13% year over year.
• The automotive core business remains profitable: Vehicle sales reached 4.6024 million units in 2025, and the automotive business gross margin was 20.49%.
• Second-quarter adjusted net profit rose 51.54% year over year, while quarterly gross margin increased to 18.89%, providing initial signs of a recovery in profitability.

6.2 Bearish Arguments

• Revenue grew 3.46% in 2025, but net profit attributable to shareholders of the parent company fell 18.97%, indicating that scale expansion failed to offset margin pressure.
• Overall gross margin fell from 19.44% to 17.74% in 2025, with both the automotive and handset businesses facing gross-margin pressure.
• Cumulative sales for the first three quarters were down 3.94% year over year; the September rebound has yet to demonstrate a reversal in the demand trend.

6.3 Other Risks

• Rising overseas tariffs, certification requirements, and localization costs → slower realization of overseas business profitability, weighing on margins and valuation.
• Customer concentration risk: The largest customer accounted for 12.53% of sales in 2025; changes in its purchasing could affect revenue and capacity utilization.
• Inventory increased approximately 37.3% from year-end 2025 and accounted for 20.18% of total assets → if sales fall short of expectations, impairment charges may rise and cash turnover may be strained.
• Accounts receivable increased approximately 35.5% from year-end while revenue declined over the same period → deterioration in collections could increase impairment losses and weaken cash-flow quality.

7. Monitoring Checklist

8. Share Price and Short-Term Outlook (One Week Ahead, Scenario Analysis for Reference Only)

⚠️ Risk Warning: The scenario weights below are subjective heuristics based on current technical and fund-flow conditions, not statistical probabilities. Short-term prices are affected by news and broader market conditions.

8.1 Technical Overview

The share price is below the MA5, MA10, and MA20, and has fallen 6.09% over the past 20 days. MACD remains negative, but the negative histogram bars have narrowed, and the price is near the lower Bollinger Band. In the short term, the first focus is whether support at RMB 81.7–82.1 holds; a rebound would need to reclaim the area around RMB 85.08.

8.2 Key Price Levels

8.3 One-Week Range Based on Historical Volatility

Using the 2026-09-30 price of RMB 83.31 as the base, the range of closing prices over the next 5 trading days is estimated from the return distribution over the past 300 trading days (scaled to the current index-weighted daily volatility of approximately 1.5%, while retaining this stock’s own frequency of large gains and losses):

This range reflects only the stock’s recent volatility and does not indicate price direction. Actual price action may exceed the range in the event of a major announcement or a sharp market decline.

8.4 Scenarios for the Coming Week (Subjective Weights, Not Statistical Probabilities)

• Consolidation (relatively higher weight, approximately 40%): RMB 81.70–85.08; the stock holds first support but fails to move decisively above MA20, remaining range-bound. Based on historical volatility, the probability of the closing price falling in this range one week later is approximately 50%.
• Further weakness (medium weight, approximately 40%): RMB 77.24–81.70; if the stock decisively breaks below RMB 81.70 on higher trading value, watch support at the 52-week low. Based on historical volatility, the probability of the closing price falling in this range one week later is approximately 30%.
• Rebound (relatively low weight, approximately 20%): RMB 85.08–89.00; would require a high-volume move back above MA20, followed by a break above the upper Bollinger Band and recent highs. Based on historical volatility, the probability of the closing price falling in this range one week later is approximately 20%.

The weights in parentheses are subjective; the probabilities at the end of each sentence are inferred from the volatility ranges above and reflect volatility only, not direction.

8.5 Funds and Liquidity

As of 2026-09-30, daily trading value over the past 10 trading days was approximately RMB 1.482–2.904 billion, with turnover of approximately 0.50%–0.97%; the latest figures were RMB 1.796 billion and 0.62%. As of 2026-06-30, the top 10 tradable shareholders held a combined 71.71% of shares; the National Social Security Fund held 0.72%, and no public funds or QFIIs were listed. Disclosures are lagged, so the shareholder structure may have changed. Trading value is substantial, but turnover is not high, indicating a certain degree of trading liquidity; shareholder concentration warrants continued attention.

If daily trading value exceeds RMB 2.904 billion for two consecutive days and the share price moves back above RMB 85.08, this could be viewed as confirmation of a high-volume breakout.

The scenario analysis above is based on closing data as of 2026-09-30 and calculations using historical prices and technical indicators. Short-term share prices are also affected by multiple factors, including news, fund flows, and broader market conditions. Technical indicators are inherently lagging and limited; this analysis does not guarantee actual future price movements and is not a buy or sell recommendation. Please make an independent judgment based on the latest market information and assume your own investment risk.

Sources

• 比亚迪股份有限公司 2025 年年度报告全文
• 投资者关系
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• 上汽集团(600104)_公司公告_上汽集团：2025年年度报告新浪财经_新浪网
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• 比亚迪(002594)_公司公告_比亚迪：2026年一季度报告新浪财经_新浪网
• 比亚迪(002594)_公司公告_比亚迪：2025年年度报告摘要新浪财经_新浪网
• F10 - 汽车整车板块 - 宽度指数|Sector Market Breadth Index
• 比亚迪(002594)_公司公告_比亚迪：2025年度利润分配实施公告新浪财经_新浪网
• 比亚迪(002594) 盈利预测_F10_同花顺金融服务网
• 比亚迪(002594) 盈利预测_F10_同花顺金融服务网
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• Listed Company Information Title Search
• BYD
• static.cninfo.com.cn（公告PDF）
• 东方财富 个股资金流向
• 东方财富 股东研究

This report was automatically researched, compiled, and generated by AI based on publicly available information. The information is current as of the 2026-09-30 close and may not reflect the latest developments. Please refer to the company’s official announcements and authoritative data terminals for specific figures. This report is for information and research reference only and does not constitute any investment advice. Investors should make independent judgments and assume their own investment risk.