At BYD’s AGM, a 150 Billion RMB Liquidity Cushion Collides With a 55% Profit Crater

BYD's annual meeting weighs a 150 billion RMB guarantee for global expansion as domestic sales plunge 24% and net profit drops 55%, while exports hit a record and India gets its first plug-in hybrid.

When BYD’s top brass convenes in Shenzhen this week, the agenda packs enough financial firepower to reshape the company’s global trajectory — but the stock, hovering barely above its 52-week low, suggests investors are far from convinced.

The annual general meeting lands at a moment of stark contrasts. Overseas sales hit a monthly record of over 160,000 units in May, catapulting the export share of total deliveries to 42 percent. Yet back home, China’s domestic market is bleeding red: the 24 percent plunge in local sales marked the 13th consecutive monthly decline. The government’s push to cool the brutal price war has handcuffed BYD’s pricing flexibility, while new driver-assistance features are failing to tempt budget-conscious buyers into paying a premium.

That domestic weakness is hammering the bottom line. Net profit collapsed 55 percent in the first quarter, and revenue shrank nearly 12 percent — a direct consequence of margins squeezed paper-thin by the relentless price competition. Wang Chuanfu, BYD’s chairman, has already described the environment as a “knockout phase” in the Chinese market, and he will need to convince shareholders that an aggressive export push can offset the damage.

A 150 Billion RMB Backstop for Global Expansion

The centerpiece of the AGM vote is a massive guarantee framework totaling 150 billion RMB. BYD intends to use it to back loans for its worldwide subsidiaries and affiliates, including cross-guarantees that link domestic and foreign entities. Limits will be set based on each unit’s leverage, and counter-guarantees are required. The move signals the magnitude of financing needed to sustain BYD’s international infrastructure buildout, even as its core Chinese operations struggle.

Shareholders will also vote on a final dividend of 0.358 RMB per share, representing a total payout of roughly 3.26 billion RMB. The ex-dividend date is set for June 11, with disbursement expected by the end of July.

India Enters the PHEV Fray

In a parallel announcement timed to the meeting, BYD India is launching its first plug-in hybrid model, the Sealion 6 DM-i. Featuring a 1.5-liter petrol engine and battery packs ranging from 18.3 to 26.6 kWh, the SUV claims a combined range of up to 1,092 kilometers. Until now, BYD had only sold pure electric vehicles in India. The pivot to hybrids is a calculated bet on a market that is transitioning to alternative powertrains more slowly than China, where PHEVs could serve as the bridge buyers need.

May’s Split Picture

BYD’s global sales hit 383,453 new-energy vehicles in May — the first year-on-year increase in nine months, albeit a wafer-thin 0.3 percent gain. The entire lift came from offshore markets. Exports surged 80 percent from the same month last year, hitting a record. Cumulatively, BYD sold roughly 1.41 million vehicles in the first five months of the year, of which about 615,900 were delivered abroad — a 65 percent increase. The full-year overseas target of 1.5 million units remains within reach.

But the home front is another story. The 24 percent domestic slide in May extends a grueling streak, and with Beijing determined to keep a lid on price cuts, BYD has limited room to reignite local demand through discounts.

Stock Stuck in the Mud

The H-share closed at €9.84 last week — just 3.5 percent above its 52-week low of €9.51 and nearly 79 percent below the year’s peak. The stock has shed more than 10 percent since January and trades roughly 11 percent under its 200-day moving average. The relative strength index sits at 38, technically on the cusp of oversold territory, but without a clear reversal catalyst.

To hit the annual target of 5.0 to 5.5 million vehicles, BYD needs to average between 517,000 and 589,000 deliveries per month for the rest of the year. The first five months produced a monthly average of just 276,000. Production line retooling is nearly complete, and capacity is due to ramp up from June onward. Whether that will be enough to bridge the gap between record exports and a struggling home market is the question that will hang over the Shenzhen meeting — and over the stock in the months ahead.