BYD's H1 2026 net profit drops 20.5% as export boom can't fully cover domestic slump

BYD posted weaker first-half results on Friday, with revenue down 7.13% year-on-year to RMB 344.82 billion (US$50.9 billion) and net profit attributable to shareholders down 20.54% to RMB 12.33 billion. The company blamed the top-line decline mainly on its new energy vehicle business, while currency swings generated foreign-exchange losses that further eroded earnings. Revenue from automobiles and related products slipped 8.98% to RMB 275.34 billion, roughly 80% of the group total, while electronics revenue edged up 0.96% to RMB 69.41 billion. NEV sales fell 15.72% to 1,808,511 units, though the pace of decline improved markedly from a 30.01% drop in Q1 to 3.24% in Q2. Overseas demand remained the bright spot: exports reached about 792,000 vehicles, up 67.8% and equivalent to roughly 44% of total volume, with Q2 overseas sales of 471,091 units up 82.46% year-on-year. That shift, along with a 61.0% surge in sales across the Denza, Fang Cheng Bao and Yangwang brands — now 12.8% of passenger-vehicle volume — pushed gross margin up to 18.85% from 18.01% even as gross profit dipped 2.81% to RMB 64.99 billion. R&D spending reached about RMB 28.9 billion, some 2.3 times net profit, and operating cash flow rose 17.3% to RMB 37.34 billion. Inventory turnover days lengthened to 109 from 79, which BYD tied to overseas growth and longer shipping times. Momentum carried into July, when sales rose 21.76% to 419,211 units for a third straight monthly gain, including a record 179,841 passenger vehicles and pickups sold abroad, up 124.3%. Management reiterated confidence in reaching 1.5 million exports for 2026.