BYD's European Gains Can't Mask 55% Profit Plunge as Stock Trades at Half Analyst Target

BYD's shares slide 40% in a year as Q1 profit plunges 55% due to price war, but global expansion and analyst rebound forecasts offer hope. Key regulatory risks remain.

Investors in BYD face an increasingly contradictory picture. The Chinese electric-vehicle giant is ramping up its global assault, grabbing a record 15% of Europe's EV market in April, while its shares have been hammered to the bottom of their 52-week range — a 40% slide over the past year. The contrast between operational momentum and market punishment has rarely been starker.

The stock, listed in Hong Kong, recently changed hands at around 92 Hong Kong dollars, just a whisker above its 12-month trough of 88.50 HKD and far from the 154.33 HKD peak. That puts BYD at roughly half the 180 HKD fair value estimate many analysts assign, a gap they attribute to the company's robust revenue outlook and stable margins. Yet the market has other worries.

Those concerns crystallised in the first quarter of 2026, when BYD reported a 55% year-on-year profit collapse — the direct result of a ferocious price war on home turf. Goldman Sachs, however, sees that as the low point. The bank expects a rebound in the second and third quarters, driven by tighter cost control and a wave of new models equipped with ultra-fast charging technology. That call has helped stabilise the equity, but only just.

Meanwhile, BYD is pressing ahead with its most aggressive overseas expansion yet. The revised Sealion 6 DM-i plug-in hybrid SUV was launched at just 129,900 Yuan (about €16,500), underscoring the company's ability to undercut rivals thanks to in-house battery production. In Europe alone, Chinese brands sold 38,281 vehicles in April — double the year-ago figure — with BYD leading the charge. The region now accounts for over 15% of the continent's EV market, a milestone analysts view as validation of BYD's low-cost strategy.

To sustain that momentum, the company is hunting for idle factories abroad, negotiating acquisitions that would help it sidestep potential tariffs and slash logistics costs. It is also pouring capital into proprietary fast-charging networks and new software features, positioning itself for a long war with legacy Western automakers. BYD sold 4.6 million vehicles in 2025, and management sees international markets as the key to future growth as China's home market saturates.

Shareholders also have a small dividend to look forward to. BYD has proposed a payout of 0.358 Renminbi per share for the 2025 fiscal year, with the ex-dividend date for H-shares set for 11 June 2026 and payment due on 31 July. Based on the current price, that yields a modest 0.39%.

Regulatory risks in Europe and the possibility of retaliatory tariffs remain wild cards. Whether BYD's market-share gains on the continent are robust enough to offset the margin pressure from China's price war will become clearer when second-quarter results are released. For now, the equity is priced as if the worst is over — or as if it has further to fall.