BYD's Order Book Is Booming and Its Profit Is Not — September's Vote Will Test Both

BYD's export growth and new models contrast with a 20.5% first-half profit drop and an 8.7% share slide over seven sessions before its Sept 24 EGM.

BYD has spent the past two weeks doing what it does best: flooding the market with metal. A cheaper three-motor version of the Denza Z9 GT arrived on Wednesday at roughly 339,800 Yuan, a move first signalled on 7 September, while the Sealion 08 — launched on 2 September — pulled in more than 12,000 orders inside 24 hours. In Indonesia, the company cut the ribbon on a plant capable of building 150,000 vehicles a year and handed over its 100,000th local vehicle.

None of it has moved the stock. The shares last changed hands at 8.70 Euro, down 8.7 percent across the past seven trading sessions, with a Relative Strength Index of 27 putting the equity deep in oversold territory. An earlier close of 8.97 Euro came after a 2.6 percent slide the previous day.

That gap between the showroom and the order book is the puzzle investors now have to solve, and 24 September is when the pieces get laid out. From that date through 29 September, BYD will close its H-share register to establish voting rights for an extraordinary general meeting. Governance changes and a brand-new asset-pool business segment sit on the agenda. What that segment actually does remains undisclosed.

Two Engines Pulling in Opposite Directions

The operational picture is genuinely split. Overseas revenue climbed 33.92 percent in the first half to 181.27 billion Yuan, lifting its share of total sales from roughly 40 percent a year earlier to 52.57 percent. Management, according to Deutsche Bank and Citi following a company meeting, has guided toward 1.9 to 2 million overseas deliveries for 2026 — close to double the prior year — and BYD has set its sights on more than 2.5 million units abroad by 2027.

The premium trio of Denza, Fang Cheng Bao and Yangwang chipped in with a 61 percent jump in combined sales. Denza is expected to add a fully electric version of the large N8L SUV in September, and the Sealion 08 now heads the Ocean line-up. Analysts have noticed: CLSA initiated coverage with a buy rating on 3 September, and Citic Securities reiterated its buy call a day later.

Back home, the arithmetic is uglier. First-half 2026 revenue fell 7.13 percent to 344.82 billion Yuan, while net profit dropped 20.54 percent to 12.33 billion Yuan. New energy vehicle volumes slid 15.72 percent to about 1.8085 million units. Chairman Wang Chuanfu blamed production bottlenecks in the second-generation Blade battery, which is still ramping. Reports suggest a backlog of roughly 250,000 units of Flash-Charge models will depend on Blade-2 supply well into early 2027.

BYD frames the profit decline largely as short-term currency pressure, insisting core profitability held firm. The second quarter does offer support for that argument — net profit rose 30 percent sequentially, and the gross margin reached 18.9 percent, the best reading in a year. Whether that is a turning point or a snapshot is precisely what the coming quarterly reports will settle.

The Cost of Staying Ahead

Research and development spending reached about 28.9 billion Yuan in the first half — roughly 2.3 times the period's net profit. That number captures the company's dilemma neatly: it must outspend its rivals to defend share in a domestic price war that has already chewed through margins, while simultaneously funding factories and model launches across Southeast Asia and beyond.

Chinese regulators added new guidelines in early September covering overseas investment, antitrust, anti-corruption and social responsibility for automakers expanding abroad. Reuters judged the measures a minor obstacle rather than a brake on the globalisation push, which leaves the export engine largely unimpeded for now.

The cheaper Z9 GT fits the same logic as the Sealion 08 and the coming N8L variant: plug portfolio gaps, shorten model cycles, and keep buyers engaged without abandoning the multi-motor architecture that defines the flagship. It is a volume strategy in a market where volume no longer guarantees profit.

What September Decides

The shareholder meeting lands at an awkward moment. Governance overhauls of this kind can shift capital allocation and shareholder rights, and the market has no advance read on which way the asset-pool structure tilts. Layer that on top of a battery bottleneck that could throttle domestic deliveries into 2027, and the risk case writes itself.

The bull case rests on exports holding their pace and the 18.9 percent gross margin proving durable rather than fleeting. If both hold, the home-market weakness looks like a transition phase. If Blade-2 supply stays constrained, pressure on group profitability builds regardless of how many vehicles BYD sells abroad.

Until the votes are counted and the battery ramp becomes clearer, the market appears to be weighting the margin damage from China's price war more heavily than the growth coming from overseas. The order book says one thing. The share price says another.