Short sellers are reducing bets against BYD Co. as the Chinese electric vehicle maker prepares to report a rebound in profit. Short interest in the company’s Hong Kong-listed shares fell to a seven-month low of 6.3%, down from nearly 8% in June, according to S3 Partners. The pullback followed China’s cut in export tax rebates and the European Union’s import cap on hybrid cars, easing policy uncertainty.
Despite this, BYD shares are on track for a third consecutive monthly decline, down 26% this year. The company is expected to report net income of 12.1 billion yuan ($1.8 billion) for the September quarter, up nearly 55% year-over-year. Unit profit per car, excluding BYD Electronic International Co., likely rose to around $1,230, a 14% increase from the previous quarter.
However, analysts remain cautious, trimming 2027 profit estimates amid stagnant domestic demand and rising costs. Kevin Net of Financiere de L Echiquier noted that declining short interest doesn’t guarantee a share price rebound. Investors are watching for signs of overseas growth and margin stability in China, where BYD faces persistent discounting pressure.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing