This is once again the case this year, with revenue declining sharply to $52bn in H1 2025, compared to $65bn in H1 2024. The decline in sales over the period is even greater than at the same time last year.
Is this simply a seasonal effect before the next upturn? That is the scenario investors are still betting on. In March, China's leading automaker successfully completed a $5.6bn capital increase—the largest in its history, with nearly 30 million shares sold at HK$111, compared with a current price of HK$114.
The Chinese market continues to expand, with 15.6 million vehicles produced in H1, up 12.5% y-o-y. Production of new electric vehicles increased by 41.4%; this category represents over 44% of new vehicle sales.
As a pioneer in this field, BYD is perfectly positioned in its domestic market. However, it has to contend with new regulations aimed at limiting aggressive commercial practices, hence the significant drop in revenue. Fortunately, BYD remains an international powerhouse, with sales outside China doubling again in H1.
The group's automotive division accounts for 80% of revenue and 75% of operating profit, with the remainder coming from its electronics division, which focuses on smartphone assembly. Its international expansion—notably the establishment of factories in Hungary, Cambodia, Turkey, and Brazil—has brought capex to unprecedented levels this semester.
BYD has just completed a cycle of exponential growth, with its revenue increasing ninefold in ten years, while operating profit increased elevenfold. Remarkably well capitalized and with no net debt, the group has been enjoying a boom since 2022, when it launched its strategy to conquer international markets, as evidenced by its return on equity, which is unmatched amongst its peers.
This continues to earn it a significant valuation premium over comparables such as GM, BMW, and Toyota, which are generally trading at or below their equity value, while BYD is trading at more than four times its equity value. The manufacturer must maintain its pace of international expansion to justify such multiples.
