CLSA has issued a research report stating that BYD Company Limited (HK: 1211) delivered third-quarter 2026 results that came in slightly below its previous expectations.
The shortfall was mainly driven by a narrowing gross margin to 18%, higher tax expenses caused by the battery consumption tax, and currency fluctuations that eroded roughly RMB 2 billion in profit from the export business.
Weighed down by these factors, the company's management has lowered its forecast for per-vehicle profit in overseas markets from the previous RMB 20,000 to RMB 16,000.
The brokerage is temporarily maintaining its "High Conviction Outperform" rating on BYD Company Limited with a target price of HK$109.
CLSA analysts noted that the company posted operating revenue of RMB 221.5 billion for the quarter, up 13.6% year on year, mainly powered by an 18.1% year-on-year surge in new vehicle deliveries over the same period.
On the earnings side, third-quarter net profit came in at RMB 10 billion, while recurring net profit after excluding non-recurring gains and losses was RMB 8.6 billion, up 4.9% quarter on quarter and 25% year on year, though the overall momentum of earnings recovery remained squeezed by multiple cost factors.
At the level of core business profitability, the gross margin of the automotive and battery business for the quarter was 21.5%, up 0.9 percentage points year on year but down a notable 1.5 percentage points quarter on quarter.
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