BYD posted its first annual profit decline in four years during 1Q 2026, missing revenue expectations and triggering a significant analyst upgrade. UOB Kay Hian analysts, who previously rated the Chinese EV giant a sell, now raise their 2026-2027 net profit estimates by 58%-100% and upgrade the rating to buy, citing upcoming technology launches and overseas expansion. They project the company's external battery sales to grow at a 38% compound annual rate through 2028, lifting their target price to HK$130 from HK$81.

Despite this positive outlook, shares fell 2.2% in Hong Kong trading. The earnings miss underscores the challenges facing the company as it navigates a maturing EV market and potential oversupply issues, even as its battery business shows strong growth potential. The market reaction highlights investor caution despite the analyst optimism, reflecting ongoing volatility in the sector.