BYD (SEHK:1211) Is Down 6.2% After Rising Sales But Falling Profit—What's Driving the Divergence?

• BYD Company Limited has released earnings results for the nine months ended September 30, 2025, reporting sales and revenue of CNY 566.27 billion, an increase from CNY 502.25 billion a year earlier.
• Despite higher sales, net income for the period decreased to CNY 23.33 billion from CNY 25.24 billion, highlighting pressure on profitability as the company grows.
• We'll explore how BYD's continued revenue growth alongside declining net income shapes the company's investment narrative going forward.

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What Is BYD's Investment Narrative?

For anyone considering BYD as a long-term holding, the belief centers on the company’s ability to scale its electric vehicle, battery, and related technology businesses beyond existing markets, while maintaining margin stability. The latest nine-month earnings report revealed revenue growth to CNY 566.27 billion, yet net income slid to CNY 23.33 billion. This shift puts new focus on profitability risks, especially as recent quarters had shown healthy growth. With analysts previously highlighting solid earnings momentum, the new results may challenge assumptions about short-term catalysts such as new product launches or European expansion driving profit improvements. While growth drivers like international factory rollouts and automotive partnerships remain, fading margins could temper bullish sentiment until BYD proves it can convert rising sales into stronger bottom-line results in future updates.  Yet even strong revenue growth can bring questions about profit sustainability.

Despite retreating, BYD's shares might still be trading 17% above their fair value. Discover the potential downside here.

Exploring Other Perspectives

Simply Wall St Community members submitted 26 individual fair value targets, ranging from CNY 118.73 billion to a very large CNY 478.66 billion. Such wide fluctuations reflect divergent views, especially as BYD’s latest earnings raise fresh questions about profit margins and short-term results. More opinions and alternative analyses await in the Community for those interested in multiple viewpoints.

Explore 26 other fair value estimates on BYD - why the stock might be worth just HK$118.73!

Build Your Own BYD Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your BYD research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
• Our free BYD research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate BYD's overall financial health at a glance.

No Opportunity In BYD?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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