BYD investors grow less pessimistic on stock ahead of earnings

After BYD Co’s dramatic stock plunge in recent months, signs are emerging that investors are getting more positive about the Chinese electric-vehicle maker as it prepares to release results later Friday.

In the options market, the number of bullish contracts outstanding has risen to near its highest level since May 2024 relative to bearish wagers, while the cost of hedging against equity losses has slumped from a high in April. With the shares down 28% from a peak in May, the bar is low for BYD’s earnings to impress investors.

Eugene Hsiao, the head of China equity strategy at Macquarie Capital, said his firm is optimistic about the stock and the financial results may be better than expected thanks to BYD’s strong overseas growth. The boost in European sales could bring currency gains given that the yuan has depreciated against the euro, and BYD’s importance in benchmark indexes might lead to more buying with improving sentiment for the broader market, he added.

Short sellers are also growing less bearish. As the stock fell, short interest dropped to 3.2% of shares available, down from almost 7% at the end of July, the latest S&P Global data show.

When the earnings are released, market watchers will focus on BYD’s average selling price and profit per vehicle to gauge the impact of its promotional efforts. The biggest Chinese EV seller has delivered 2.1 million autos in the first six months of the year and targets to sell 5.5 million cars in 2025.

© 2025 Bloomberg

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