BYD’s Atto 3 Landslide Meets Softer Profit Call: Two Signals, One Stock

BYD's revamped Atto 3 gets 30,000 first-week orders; stock down 77% in year. May exports hit record 42% of sales. Citi sees Q2 profit beat, but domestic sales remain weak.

The Chinese electric-vehicle maker BYD is sending mixed messages to investors. A deluge of more than 30,000 orders for its revamped Atto 3 in the first week on sale sits awkwardly alongside a stock that has shed roughly 77% over the past twelve months. On Wednesday the shares dropped another 3.48% to EUR 10.16, extending a slide that has seen them trade well below the 50-day moving average.

The updated compact SUV arrives with a new platform promising ultra-fast charging and a range of up to 630 kilometres. The order intake marks a sharp reversal from April, when deliveries of the previous version collapsed. May’s global sales of around 383,000 vehicles — a whisper-thin 0.3% year-on-year increase — ended an eight-month streak of declining volumes. The recovery was powered by exports, which hit a record 160,644 units and accounted for 42% of total sales.

Citi’s bullish profit scenario

While the share price remains under pressure, analysts at Citi are betting on a significant earnings surprise. Their forecast for second-quarter net profit falls between 10.3 billion and 12.4 billion yuan, well above the market consensus of 8 billion to 9 billion yuan. The optimism rests partly on May’s month-on-month sales jump of 19.4% and the continuing shift toward higher-margin exports.

Goldman Sachs also sees a turning point, arguing that profitability has already bottomed out in the first quarter. The broader picture, however, remains challenging on BYD’s home turf, where domestic sales are still running 20% lower year-to-date. The group is ploughing roughly 100 billion yuan into intelligent-vehicle technologies to bridge the gap with global rivals.

A chip and a cargo ship

On 28 May BYD unveiled the XUANJI A3, billed as China’s first 4-nanometre automotive chip. The component is designed to power driver-assistance systems and autonomous driving features as part of the “God’s Eye” platform. The move underscores a strategic pivot toward high-performance computing as a differentiator, especially as the company pushes into markets like Australia, where it has become the second-largest electrified-vehicle brand behind Toyota.

To sustain that expansion, BYD is shipping another 30,000 cars down under, with the first 4,900 units arriving this week. Management has not ruled out eventual local production in Australia. For now, volume is the priority: May’s export ratio of 42% is a record high.

Eyes on the next quarter

The stock’s reaction to these operational improvements has been muted at best. After rising 4.55% on Tuesday, the shares gave back 2.68% the following day to EUR 10.25. The 52-week peak of EUR 46.39 is almost 78% away, and a sustained breakout would require clearing resistance at EUR 11.10. The second-quarter report due in August will test whether Citi’s profit call — or the market’s scepticism — wins out. For the Atto 3, maintaining the current order clip would provide the clearest signal that the company’s domestic rut is finally ending.