Key Takeaways:
- Citi launches 30-day positive catalyst watch on BYD after May wholesale beat
- May wholesale volume reached 383,000 vehicles, up 19.4% month over month
- Citi forecasts 2Q net profit of RMB10.3-12.4B, above consensus of RMB8-9B
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BYD rises 3.1% after Citi flags May wholesale beat, catalyst watch
Citi launched a 30-day positive catalyst watch on BYD Co. after May wholesale volume of 383,000 vehicles beat expectations, the broker said Monday.
"BYD's May wholesale volume reached 383,000 vehicles, up 19.4% month over month and 0.3% year over year, beating market expectations," Citi analysts said in a research report. The strong performance was driven by export sales of 161,000 vehicles, which surged 80% year over year and 19% month over month.
The broker forecasts second-quarter 2026 net profit, excluding foreign exchange effects and BYD Electronic, will reach 10.3 billion yuan to 12.4 billion yuan, above the market consensus of 8 billion yuan to 9 billion yuan. Export operations are expected to contribute 9.8 billion yuan in net profit, while domestic and energy storage system businesses are projected to generate 750 million yuan to 4 billion yuan. Citi said that if export volume growth combines with an improving domestic mix, earnings visibility for BYD's electric vehicle business would strengthen in the second half of 2026. The forecast implies second-quarter net profit could exceed the current consensus by as much as 38 percent at the top end of the range.
BYD shares opened 3.14% higher at HK$93.6, with turnover of 1.13 million shares worth HK$106 million. Short-selling interest stood at 29.4% of turnover, indicating elevated bearish positioning that could fuel further gains if the positive view materializes.
The export surge positions BYD to compete more aggressively with Tesla Inc. and other global automakers in markets across Southeast Asia, Europe and Latin America. Chinese EV makers have increasingly turned to overseas markets as domestic competition intensifies and price competition compresses margins. BYD's export business alone could generate nearly 10 billion yuan in quarterly net profit, according to Citi's estimates, highlighting the growing importance of international markets to the company's bottom line.
The 30-day watch suggests Citi expects near-term momentum from export growth and improving domestic revenue mix. If June wholesale volume remains flat month over month and retail sales grow 3 percent in May and 8 percent in June, as Citi models, second-quarter net profit would land well above current estimates. Investors will watch the monthly data releases for confirmation of the trend.
This article is for informational purposes only and does not constitute investment advice.
