On July 16th, BYD's A-shares and H-shares both closed higher, with the A-shares gaining 2.59% and the H-shares rising 4.6%. Since the recent lows on June 29th, BYD's A-shares have surged over 20%, while the H-shares have climbed approximately 25% from their low on June 30th. Amidst a broader market correction, BYD has defied the trend this month, accumulating gains exceeding 20%.
The latest closing market capitalization for BYD's A-shares stands at approximately 858.29 billion yuan, with the H-shares at around 829.21 billion yuan. The question arises: could this rally propel BYD's market cap back to the 1 trillion yuan mark, or even higher?
Analyzing the Drivers of the Rally
The recent upswing can be attributed to two primary factors: a new product cycle and a significant breakout in overseas expansion, encompassing both new energy vehicles and energy storage shipments. This combination has the potential to drive the company's valuation back to or beyond the 1 trillion yuan level.
Whether it reaches new all-time highs will depend on market conditions. Recent sales data for June shows BYD's total sales reached 403,500 units, achieving both year-on-year and month-on-month growth of 5.46% and 5.21%, respectively. The core driver of this dual growth was a dramatic increase in overseas sales.
In June, overseas sales hit 174,900 units, soaring 95% year-on-year and increasing 9.15% month-on-month. Cumulative overseas sales for the first half of 2026 reached 789,400 units, a 70.65% increase year-on-year.
Despite the overseas surge, BYD's total sales for the first half of the year were 1,808,500 units, representing a 15.72% year-on-year decline, primarily due to weak domestic performance. Excluding overseas sales, domestic sales in June were 228,600 units, a significant 21.94% year-on-year drop, impacted by intense domestic competition, reduced subsidies, and an aging product portfolio.
With the arrival of BYD's new product cycle, domestic sales are expected to recover and potentially enter a new growth phase.
Technological Advancements and Market Response
A major technological highlight for BYD this year is the launch of its flash-charging technology. According to the plan, BYD aims to offer flash-charging as an option across its entire pure electric vehicle (EV) lineup within 2026, implementing mass production from high-end to entry-level models, covering vehicles from 110,000 yuan to million-yuan luxury cars.
Market reception for this technology appears strong. Orders for the latest Tang EV model equipped with flash-charging have been robust, with reported reservations exceeding 60,000 units within 72 hours of its June 17th launch, and some sources indicating up to 100,000 units. The conversion rate from initial interest to firm orders reached 43.3%, with store traffic increasing 60%-70%, and 85% of customers being existing owners upgrading or switching.
Current delivery wait times for the Tang EV are 2-3 months, mainly due to limited capacity for its dedicated second-generation Blade Battery. With new production lines for this battery coming online, delivery speeds are expected to accelerate.
For 2026, the flash-charging version will be available only in pure EV models. Once coverage across the EV lineup is complete, the technology could be extended to hybrid models in 2027; currently, only the premium Yangwang U8 hybrid features it. This indicates BYD still holds significant technological cards to play, though applying flash-charging to hybrids may be less efficient than focusing on further advancements like 1000V megawatt-level charging for pure EVs, depending on future cost reductions.
Overseas Expansion and Profit Outlook
Beyond the new product cycle, BYD's export business is experiencing a major breakout. The company's export target for 2026 is 1.8 million vehicles. With first-half overseas sales at 789,400 units and June alone reaching 174,900 units, maintaining this monthly level in the second half would easily achieve the annual target. Sustained monthly growth could even lead to exceeding the goal.
Overseas markets are generally considered higher-margin. Even after accounting for tariffs and logistics, BYD's pricing overseas is significantly higher than domestically. Due to the overseas sales surge, analysts widely expect BYD's Q2 profit to reach 8-9 billion yuan. International banks like Citi, UBS, and Goldman Sachs project Q2 profit could hit 9.5-10.2 billion yuan.
UBS estimates Q2 net profit per vehicle at 8,728 yuan, a substantial increase from Q1, driven by overseas price premiums, better-than-expected energy storage shipments, and lower-than-expected foreign exchange pressure due to a relatively stable RMB.
Energy Storage as a Growth Engine
The energy storage business represents BYD's most important second growth curve this year. Vice President Li Ke stated that 2026 energy storage production capacity is fully booked and sold out, with orders extending into 2028.
Energy storage system shipments for the first half of 2026 are estimated between 68 GWh and 75 GWh, already surpassing the total for the entire year of 2025. With gross margins around 26%, this segment is more profitable than the automotive business.
Given these factors—a powerful new product cycle, explosive overseas growth, and a high-margin energy storage business on a steep trajectory—BYD Company Limited merits serious consideration from investors.
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