BYD's third-quarter results improved markedly, with single-quarter profitability rising substantially, though overall net profit for the first three quarters still declined year-on-year due to foreign exchange losses and shrinking investment income.
In the third quarter, BYD Company Limited (002594) achieved operating revenue of 221.488 billion yuan, up 13.59% year-on-year; net profit attributable to shareholders of the listed company reached 10.019 billion yuan, up 28.08% year-on-year, marking its strongest single-quarter performance in recent times. After deducting non-recurring gains and losses, single-quarter net profit was 8.630 billion yuan, up 25.25% year-on-year, indicating sustained improvement in core business profitability.
However, weighed down by foreign exchange losses and a sharp contraction in investment income, net profit attributable to shareholders for the first three quarters was 22.345 billion yuan, down 4.24% year-on-year. Even so, non-GAAP net profit attributable to shareholders reached 21.004 billion yuan, up 2.51% year-on-year, reflecting a stable underlying main business. Net cash flow from operating activities was 54.470 billion yuan, up 33.36% year-on-year, providing strong support for the company's continued expansion.
Q3 Profit Acceleration Sets Recent High
The improvement in third-quarter results was mainly driven by revenue growth and cost control. Operating costs for the first three quarters were 461.429 billion yuan, down from 465.054 billion yuan a year earlier, boosting gross margin. Meanwhile, R&D expenses fell to 36.277 billion yuan from 43.748 billion yuan in the same period last year, a notable decline that contributed positively to profit.
Regarding non-recurring gains and losses, the third quarter saw a total of 1.389 billion yuan, primarily from government subsidies of 825 million yuan recognized in current profit and loss, as well as 1.131 billion yuan in fair value gains on financial assets.
FX Losses and Investment Income Decline Erode First Three Quarters' Profit
Financial expenses were the core factor pressuring profits in the first three quarters. Financial expenses for the period were 7.368 billion yuan, compared with -2.936 billion yuan (a net gain) in the same period last year, mainly because foreign exchange losses occurred this period versus foreign exchange gains last year, creating a difference of more than 10 billion yuan.
Investment income also contracted sharply. Investment income for the first three quarters was only 247 million yuan, down 87.88% from 2.040 billion yuan a year earlier, mainly due to increased losses from derecognition of financial assets measured at amortized cost and expanded losses from disposal of trading financial assets.
In addition, credit impairment losses and asset impairment losses rose 204.90% and 67.60% year-on-year, respectively. The former mainly reflects expected credit losses provisioned as receivables scale expanded, while the latter is related to increased inventory write-down losses amid inventory expansion.
Overseas Business Expansion Drives Both Inventory and Receivables Higher
The balance sheet shows that BYD's overseas auto business is in a rapid expansion phase. As of the end of September, inventory stood at 221.578 billion yuan, up 60.08% from 138.421 billion yuan at the beginning of the year. The company explicitly stated in its financial report that the main reason was "growth in the overseas auto business and increased stockpiling."
Accounts receivable rose to 56.473 billion yuan, up 52.61% from 37.005 billion yuan at the beginning of the year, also attributed to the increase in overseas auto business. At the same time, contract liabilities (advance receipts) increased to 92.946 billion yuan, up 80.58% year-on-year, reflecting favorable advance payments for vehicle orders.
Construction in progress reached 79.181 billion yuan, up 63.96% from 48.294 billion yuan at the beginning of the year, indicating the company continues to step up capacity investment. Total assets rose to 948.941 billion yuan, up 7.38% from the beginning of the year.
Capital Structure Adjustment, Debt Repayment Intensity Increases
The cash flow statement shows that net cash outflow from investing activities in the first three quarters was 68.857 billion yuan, but narrowed sharply by 46.02% from 127.571 billion yuan a year earlier, mainly due to cash spending on long-term assets such as fixed assets falling to 87.379 billion yuan from 114.933 billion yuan, as well as an increase in other cash received related to investing activities.
Net cash outflow from financing activities was 23.082 billion yuan, compared with a net inflow of 101.663 billion yuan in the same period last year. The main reason is that the same period last year included large-scale borrowing inflows and H-share placement financing, while this period saw cash spending of 109.900 billion yuan on debt repayment and no H-share placement.
Short-term borrowings decreased by about 51.9 billion yuan from the beginning of the year to 18.670 billion yuan, while bonds payable increased to 14.994 billion yuan from 4.998 billion yuan, a rise of 200.01%, reflecting an adjustment of the company's debt structure toward longer maturities.
Board Completed Transition, Management Structure Updated
The company completed its board transition on September 29, 2026, with the ninth board of directors formally established. Wang Chuanfu was re-elected as executive director and chairman of the board. Lu Xiangyang, Xia Zuquan, Cai Hongping and Li Yongzhao were appointed as non-executive directors, Li Gang, Yu Ling and Xu Tu as independent non-executive directors, and Tang Mei as employee director.
On the same day, the first meeting of the ninth board of directors reviewed and approved a series of management-related proposals, including the appointment of the president and the election of members of various specialized committees, completing the update of the company's governance structure.
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