BYD's Sky Has Changed

Overseas markets are carrying the weight.

Under the dual disturbance of domestic price wars and international currency fluctuations, BYD released a semi-annual report characterized by "short-term pressure and upward structural trends".

In the first half of this year, BYD's sales, revenue, and profit all saw year-on-year declines. Upon news breaking, BYD's HK shares and A-shares fell by 5.17% and 4.46% respectively in the first trading day.

However, securities firms are almost unanimously optimistic: overseas revenue surpassed domestic for the first time, premium brands accelerated volume growth, flash charging technology launched a new product cycle...

What exactly does this "financial report with pressure on the books and upgraded structure" tell us?

According to the report, in the first half of this year, BYD's sales reached 1.8085 million units, operating revenue was 344.815 billion yuan, and net profit attributable to the parent company was 12.325 billion yuan.

Whether it's revenue or profit, BYD is one of the top players.

It's worth mentioning that BYD is the only listed automaker with revenue exceeding 300 billion yuan, and its net profit attributable to the parent company is one of only two listed automakers to break the 10 billion yuan mark.

However, in terms of sales volume, BYD lost to SAIC Motor by a margin of 237,000 units, losing the title of sales champion among Chinese listed automakers.

However, with the launch of flash charging technology, starting from May, BYD reclaimed the title of monthly sales champion among listed automakers, and the cumulative gap between the two is quickly disappearing.

In addition, BYD's R&D investment is far ahead of other listed automakers. In the first half of this year, although its R&D investment fell 6.54% year-on-year to 28.861 billion yuan, it was still 3.6 times that of SAIC Motor (8.111 billion yuan).

As of the first half of this year, BYD's cumulative R&D investment exceeds 270 billion yuan.

Speaking of the most outstanding performance, it is undoubtedly the overseas market.

In the first half of this year, BYD's overseas sales reached 792,000 units, a year-on-year increase of 67.8%, accounting for 43.8% of total sales. In August alone, overseas sales surged to 189,500 units, a staggering 134.4% year-on-year increase, setting a new all-time high.

In the UK, Brazil, Thailand, and other places, BYD has topped the sales list of new energy brands. Its business footprint covers over 120 countries and regions worldwide.

More critically, the overseas business not only contributed to sales volume but also reshaped the profit structure.

[Image Source: BYD Semi-Annual Report]

In the first half of this year, BYD's overseas revenue was 181.268 billion yuan, a year-on-year increase of 33.92%, with its share of total revenue breaking 50% for the first time to reach 52.57%.

At the same time, the gross margin of overseas business reached 21.71%, significantly higher than the domestic 15.67%. This means that with 43.8% of sales volume and 52.57% of revenue, the overseas market contributed about 60% of the gross profit for BYD.

In other words, BYD's profit engine is shifting from domestic to overseas. This is also the most iconic change in this semi-annual report. "Autoskline" believes this will also firm up the implementation of overseas strategies for other Chinese listed automakers.

Premiumization is the second upward curve for BYD.

The Fang Cheng Bao, DENZA, and YANGWANG brands combined for 228,000 units in sales over the half-year, a year-on-year increase of 61.03%, raising their share of total sales to 12.61%.

Among them, Fang Cheng Bao contributed the most, with 159,500 units sold in the first half of the year, a surge of 162.53% year-on-year; however, DENZA and YANGWANG faced pressure. The former sold 66,500 units in the first half, a 16.65% year-on-year drop, while the latter grew 96.61% year-on-year but sales were only 1,972 units.

With the volume increase of premium models, BYD's profit structure is being reshaped. Premium brands bring not only higher unit prices but also the potential to improve gross margins and reduce reliance on low-price volume-selling models.

However, it should be noted that premium brands currently account for only 12.6% of total sales volume. Although the growth rate is fast, the volume is not yet sufficient to fully offset the slowdown in the domestic mass market.

It can be said that premiumization is currently only the starting point of the second curve.

Although BYD's performance is far ahead, underlying concerns should not be ignored either.

The most eye-catching is the significant evaporation of net profit attributable to the parent company. In the first half of last year, BYD's net profit attributable to the parent company was 15.511 billion yuan, while this year it is only 12.325 billion yuan, evaporating nearly 3.2 billion yuan, a year-on-year drop of 20.54%.

At the same time, daily profit dropped below the 100 million yuan benchmark, to about 6.809 million yuan.

There are two direct reasons.

First, the RMB appreciated against the USD in the first half of the year, and BYD recorded 4.703 billion yuan in exchange rate losses, compared to a gain of 3.16 billion yuan in the same period last year, a difference of 7.863 billion yuan in total.

BYD attributed the decline in net profit to this, but it exactly exposed the risks under the current international environment. The faster BYD expands overseas, the greater the impact of currency fluctuations on the income statement.

Second is the slowdown in the domestic market. In the first half of this year, BYD's domestic revenue was 163.547 billion yuan, a sharp decline of 30.68% year-on-year. Automotive business revenue was 275.341 billion yuan, a decrease of 8.98% year-on-year, which almost explains the reason for BYD's 7.13% revenue decline in the first half of the year.

Domestic sales faced pressure, and BYD's sales in the first half of the year dropped by 15.72%. Wang Chuanfu admitted that sales falling short of expectations were directly related to insufficient capacity of the second-generation Blade Battery.

A deeper concern lies in the continuous erosion of profits by the automotive price war.

In the first half of this year, the automotive industry's profit margin was only 3.76%, while the complete vehicle manufacturing profit margin was as low as 1.5%. BYD's average selling price per vehicle dropped from about 160,000 yuan in Q1 to 136,000 yuan in Q2.

In this bleeding-style competition across the entire industry, even the leader finds it difficult to stay unharmed.

Unlike short-term market sentiment, mainstream securities firms are almost unanimously optimistic about BYD's mid-to-long-term development, because after excluding exchange rate disturbances, the profitability quality of the main business is actually improving significantly.

Guojin Securities calculated that after restoring the post-tax exchange rate impact and excluding the contribution of BYD Electronic, actual Q2 profit was about 10.3 billion yuan, a surge of 182% year-on-year. Under this metric, profit per vehicle reached 9,300 yuan.

Huatai Securities believes that the strong rebound in Q2 earnings was benefited by the launch of the flash charging technology new product cycle and the continued high growth of overseas business, maintaining a "Buy" rating.

Kaiyuan Securities pointed out that Q2 gross margin saw significant year-on-year recovery, overseas markets continued to volume up, maintaining a "Buy" rating.

Orient Securities emphasized that August overseas sales of 189,500 units reached a new high again, expecting overseas markets to become a core growth pole, with a target price of 125.28 yuan.

BOCI expects BYD's export performance in the second half of the year to be good, maintaining a target price of 138.53 HKD.

Guotai Haitong Securities pointed out that overseas revenue surpassed domestic for the first time, and the flash charging ecosystem is accelerating its implementation, maintaining a "Overweight" rating.

Overall, exchange rate losses are paper losses, overseas business is the core growth engine, and flash charging technology + premiumization reshaping competitiveness is the concentrated consensus among institutions regarding their optimism for BYD.

When the automotive main business enters a period of deep adjustment, BYD's layout in other fields is also worth paying attention to.

The energy storage business has become a tangible landing project for BYD. In the first half of 2026, BYD's energy storage system shipments ranked first globally. Products entered over 110 countries and regions, covering scenarios such as source-grid-side energy storage, commercial and industrial energy storage, residential energy storage, and AIDC computing power energy storage.

Currently, BYD is seizing the dual strategic opportunities of global new energy transition and the release of AI computing power demand. However, price competition in the energy storage industry is also fierce. It is uncertain whether scale advantages can be converted into profit advantages.

Regarding semiconductors, the self-developed 4nm process intelligent driving chip "Xuanji A3" launched by BYD in May has been mass-produced on a large scale. In September, it launched a new generation 4D mmWave radar chip centered on Xuanji A3's computing power, fully covering L2-L4 level intelligent driving applications. Cumulative shipments of BMS AFE chips have broken through 100 million units.

In electronics and AI computing power, the AI computing infrastructure business continues to advance, and overseas customer liquid cold plate projects have entered the mass production ramp-up phase. BYD Electronic's revenue in the first half of the year was 82.234 billion yuan, a year-on-year increase of 2.02%; net profit attributable to the parent company was 426 million yuan, a year-on-year decline of 75.35%.

Robots are then more distant options.

Nowadays, more and more automakers are starting to "make humans", and BYD is no exception.

In August 2026, BYD's first humanoid robot "Xiao Di" completed its global debut at the World Robot Conference, and announced to directly transition to routine factory service. The first landing scenarios were parts handling and quality inspection on internal production lines.

It is reported that the project was initiated by the 15th Business Division in 2022, with an R&D cycle of about 4 years.

BYD Executive Vice President Li Ke publicly confirmed that the company is developing humanoid robots, and pointed out that "BYD's current focus is industrial robots, because BYD is originally the largest user".

In addition, BYD has invested in Agibot Robotics and signed a strategic cooperation agreement with tactile perception company Pasini. The future plan is to deploy robots in each dealer store to undertake tasks such as greeting reception and model explanation.

Of course, the robot business has little contribution to the current financial report, more of a layout for the next decade.

Its value lies in the fact that BYD itself is one of the largest users of industrial robots, and can use internal scenarios to feedback iteration. However, the commercialization pace, cost reduction curve, and external customer expansion still need time to verify.

From BYD's semi-annual report, it is in a period of structural gear shifting.

The old engine of the domestic mass market is slowing down under the dual squeezing of price wars and capacity bottlenecks. As new engines for overseas markets and premium brands are accelerating, but they are not yet sufficient to fully offset the slowdown of the old engine.

Overseas revenue surpassing domestic for the first time is a landmark node of this gear shift; the risks exposed by exchange rate losses are the inevitable cost of the gear shift process.

The key is whether the structural improvement of overseas and premium markets can offset the pressure of domestic price wars within a sufficiently short period of time?

There is no conclusion yet, but the direction is clear. BYD is evolving from a domestic-market-dependent hit-driven automaker into a globally distributed, technology-driven diversified technology group.

The layout of businesses such as energy storage, semiconductors, and robots is laying the groundwork for the next decade of this manufacturing giant. This process is destined not to be smooth.

Views of Autoskline:

The direction is clear, but the answer is still on the way. What BYD needs to do is not to prove that it will not decline, but to prove that it can complete evolution amidst decline.

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