BYD Expects Profits to Double on Record Sales, Aims to Overtake Tesla

Shares of BYD surge as the Chinese electric-vehicle maker forecasts a doubling of quarterly profit.

BYD, a leading Chinese electric-vehicle manufacturer, projects that its quarterly profit could double due to record sales. This optimistic outlook comes as the company targets surpassing Tesla's sales volume.

Surge in Shares

Despite a weak broader market, BYD's H shares experienced a significant 8.0% increase, reaching 260.00 Hong Kong dollars (US$33.23) on Wednesday. This gain marks its largest one-day surge this year. Year-to-date gains for BYD now stand at an impressive 35%.

In China, the company's A shares saw a 4.95% rise to 249.79 yuan.

Robust Third-Quarter Performance

BYD, known for its production of electric vehicles, handset components, and batteries, announced that it expects third-quarter profits to reach between CNY9.55 billion ($1.31 billion) and CNY11.55 billion. This projection is a substantial increase from the CNY5.72 billion reported in the same period last year.

Consolidating its positive forecast, BYD's third-quarter data revealed a remarkable 67% rise in fully electric-vehicle sales, with a total of 431,603 units sold. This puts BYD on track to potentially surpass Tesla's position as the global leader in electric vehicle sales. During the same period, Tesla reported a decrease in sales from 466,140 units to 435,059 units.

Positive Outlook from Analysts

Analysts from HSBC, led by Yuqian Ding and Li Yang, have maintained a buy rating on BYD with a target price of HK$408.00. They expressed confidence in the company's strong product cycle in the new energy vehicle market and its potential for higher profitability.

Nomura analysts also expressed optimism about BYD's market leadership in China, with a 36.5% year-to-date market share in EV retail sales. They have maintained a buy rating on the company with a target price of HK$356.00.