BYD Stock: Record Sales, Yet the Share Price Keeps Falling
1211.HKBYD Company Limited
Graham-Dodd primary, deliberately no DCF
Reported FCF is negative (2025: CNY –97.7bn), and even a normalised owner FCF would be. A DCF would have to assume a speculative turnaround. Segment earnings are not available, so no SOTP either. Graham-Dodd: HK$22.7 / 65.5 / 103.0 at 0 / 8 / 15% growth.
Update Oct 16: Is the analysis still current?
The analysis dates from Oct 9 (close HK$75.60). No new quarterly figures since – every section stands. Little has changed, but the stock is at a decisive point:
- Price down 2.4% to HK$73.75. The stock sits right inside the HK$72.5–74.6 confluence zone (June low + 78.6% retracement of the five-year range). The weekly low of HK$71.70 briefly undercut the June low, but the close recovered above it – the double-bottom test is under way.
- First momentum signal. The MACD bullish cross the analysis described as "possible" has happened (MACD –2.69 above signal –2.84) – a counter-trend signal below the zero line. RSI 35.8; the historically strongest zone (RSI < 30) has not been reached yet.
- Trend still down. The SMA50 (82.8) and SMA200 (91.8) keep falling and sit well above the price.
- Market backdrop. VIX up from 15.2 to 20.0. For BYD this remains secondary – the price war, capital intensity and trade policy dominate.
Verdict: The analysis is fully current. Invalidation of the bottoming: a weekly close below ~HK$72. The next catalyst is Q3 results, expected around Oct 29 (verify the date with the company).
Fundamentals vs. Technicals
Fundamentals: bottoming confirmed
Q3 sales of 1.32m NEVs (+18.8%), a record September for the year (463,561), exports +154% in September. Gross margin has risen four quarters in a row to 18.9%, and Q2 delivered the first positive FCF (CNY +11.9bn) with capex halved. On the minus side: H1 revenue still –7%, financial debt almost tripled in 2025 (CNY 119bn).
Technicals: no horizon points up
Price below the SMA50 and SMA200, weekly death cross (Jun 5), 14.8% below the 200-week line and below the lower 52-week Bollinger band – a statistical extreme. Only the formal regime label (SMA100 > SMA200) still reads "bull". Against peers, BYD moves in lockstep with BMW (12M –30.5%) and Mercedes (–21.2%).
Valuation: Graham-Dodd & multiples
| Metric | BYD | BMW | Mercedes |
|---|---|---|---|
| Forward P/E | 11.9x | 6.1x | 5.9x |
| EV/EBITDA | 5.7x | 9.8x | 10.2x |
| Gross margin | 17.9% | 12.4% | 16.2% |
| Unit/revenue growth (last qtr) | +18.8% units | –7.9% revenue | –3.3% revenue |
Graham-Dodd: EPS TTM CNY 3.23 = HK$3.78 (CNY/HKD 1.1715), Y = 10-year Treasury 5.22% + 1.0pp = 6.22%. Bear HK$22.7 / base 65.5 / bull 103.0. The price implies ~9.9% sustainable annual growth – moderate relative to unit growth, demanding relative to the 2025 EPS decline (–22%). BYD trades at a P/E premium to the German peers but is cheaper on EV/EBITDA.
Key Chart Levels
Support: June low and the 78.6% retracement of the five-year range (confluence zone HK$72.5–74.6). Resistance 1: 78.6% retracement of the six-month move HK$112.66 → 72.45, above it the falling SMA50 (as of Oct 16). Chart levels, not a trading recommendation.
Context Check (Macro)
The main drivers are China-specific: the price war in the domestic market (domestic sales down year to date) and EU trade policy, which BYD sidesteps via plug-in hybrids and local production. The yuan trades at HK$1.17 – measured in HKD, BYD's earnings are worth more, so the de-rating is stronger than the share price alone suggests.
US rates (10-year at 5.10% on Oct 16) and the VIX jump to 20.0 dampen global risk appetite, but only secondarily for BYD; the Hang Seng is down just 9.5% over 12 months versus BYD's –31%. Next catalyst: Q3 results ~Oct 29, 2026, October sales in early November.
The Devil's Advocate
"BYD already looked cheap at HK$85 – it is 14% lower since. A low multiple alone is not a floor."
2025 capex: CNY 157bn, FCF CNY –97.7bn, financial debt almost tripled. One positive quarter with halved capex is not yet a trend – the market is punishing exactly this side and ignoring the volume.
Forward EPS of HK$6.35 implies +68% versus TTM. Revenue was still 7% below the prior year in H1, and the earnings recovery has yet to arrive. Even the lowest price target (HK$88) assumes a clear improvement.
Over the past five years, the daily death cross (SMA50/200, n=5) delivered an average –8.0% after 20 days with only a 20% hit rate. Trend followers see no reason to buy into a falling market.
Interactive Graham-Dodd Calculator
| Item | Value | ||
|---|---|---|---|
Formula: V = EPS × (8.5 + 2g) × 4.4 / Y, with Y = 6.22% (10-year Treasury 5.22% + 1.0pp). EPS TTM HK$3.78; the analysts' forward EPS of HK$6.35 gives roughly HK$110 at 8% growth – exactly the earnings recovery the market currently does not believe in.
| P/E TTM / forward | 20.0x / 11.9x |
| EV/EBITDA | 5.7x |
| Gross margin Q2/26 | 18.9% |
| Q3 unit sales | 1.32m (+18.8%) |
| Exports Sept. | +154% |
| FCF Q2/26 | CNY +11.9bn |
| FCF 2025 | CNY –97.7bn |
| Financial debt 2025 | CNY 119bn |
| 12M performance | –31.1% |
| Q3 results | ~Oct 29, 2026 |
BYD's clearest signal over the past five years: RSI below 30 (n=21) returned +1.85 / +3.73 / +5.15% after 5/10/20 days with 62 / 65 / 74% hit rates – about +4.4pp above baseline after 20 days. RSI currently stands at 35.8, so the signal has not triggered yet. On the full history (n=89) the edge is much smaller.
- Full QualiStocks research report (as of Oct 9, 2026)
- Prices & indicators: yfinance, close Oct 16, 2026
- Financials, analysts, peers: yfinance (not checked against the HKEX filing)
- BYD September sales – CnEVPost
- BYD overseas sales +154% – CleanTechnica
More analyses
Every valuation model lands at $22–121, the stock trades around $355. Roughly $1.3 trillion of market value is option value for Robotaxi, FSD and Optimus – and Q3 results arrive on Oct 21.
On today's revenue, sum-of-the-parts gives $27–70; on 2027 consensus $92–179. The stock has fallen 9% since the analysis and broken a key Fibonacci level.
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