BYD's June sales resumed YoY growth, with overseas sales and Datang SUV orders as the core incremental drivers

Overview

This report is a company update on BYD by Deutsche Bank, focusing on June sales, overseas sales, domestic orders, the launch of the Datang SUV, the supply transition of second-generation Blade Batteries, and the in-house intelligent driving chip Xuanji A3. The report believes that although domestic wholesale sales declined YoY, record-high overseas sales and strong orders for new models support BYD entering a stronger delivery and profit cycle in the second half of the year.

Core views

The core views of the report are: first, the group's June sales returned to positive YoY growth, with overseas markets as the main source of incremental growth; second, the launch of the Datang flagship SUV significantly boosted orders, and the order backlog and waiting period indicate strong demand; third, the sharp QoQ increase in second-quarter sales will release operating leverage and improve product mix due to zero discounts on some models amid battery supply tightness; fourth, as second-generation Blade Battery capacity increases month by month, the supply bottleneck is expected to ease by the end of the third quarter; fifth, the in-house Xuanji A3 chip strengthens BYD's integrated intelligent driving hardware-software capabilities.

Analysis framework

The report adopts a combined approach of sales tracking, order estimation, capacity constraint analysis, earnings forecasting, and technology strategy analysis: it breaks down monthly wholesale sales into overseas and domestic performance, uses Thinkercar weekly orders to estimate June orders, explains delivery waiting times and discount changes through the supply pace of second-generation Blade Batteries, and derives the second-quarter net profit forecast based on QoQ sales growth, operating leverage, and product mix improvement.

Methodology notes

• Sales trackingYoY and MoM sales breakdown

  Break down group, overseas, and domestic wholesale sales separately by YoY and MoM changes.

  This method is used to identify growth sources: the group's June sales rose 5% YoY, of which overseas sales rose 95% YoY, while domestic sales fell 22% YoY, indicating that overseas expansion contributed more to overall growth.

• Demand validationOrder and backlog validation

  Assess end-market demand through weekly orders, new-model order backlog, and waiting periods.

  The report cites Thinkercar data to estimate June new orders at about 291,000 units, and notes that the Datang SUV has a non-cancellable order backlog of over 70,000 units with a waiting period of more than three months, indicating strong demand for the new vehicle.

• Profitability analysisOperating leverage and product mix analysis

  QoQ sales growth dilutes fixed costs, while high-demand, low-discount models improve the profit structure.

  The report expects second-quarter net profit to rise 145% QoQ to RMB 10 billion, mainly based on 58% QoQ sales growth in the second quarter, operating leverage release, and no price discounts on related models amid battery shortages.

• Supply chain analysisBattery capacity ramp-up constraints

  The transition of second-generation Blade Batteries from long-blade to short-blade format has created a temporary supply bottleneck.

  The report notes that tight supply of second-generation Blade Batteries has led to delivery waiting periods of one to two months for some models, but the company plans to add capacity related to about 30,000 vehicles per month and expects to fully resolve the shortage by the end of the third quarter.

• Technology strategyIn-house chips and intelligent driving capabilities

  In-house autonomous driving chips enhance hardware-software integration and competitiveness in advanced intelligent driving.

  Xuanji A3 adopts a 4nm process, a 16-core CPU, and a 3-core NPU cluster architecture. The report believes it can support L3 and L4 autonomous driving and offer strong energy efficiency.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• BYD 1211.HK

  Core covered target

  Strengths

  Record-high overseas sales, strong Datang SUV orders, sharp QoQ increase in second-quarter sales, second-generation Blade Battery capacity ramp-up, and progress in in-house intelligent driving chips.

  Weaknesses

  Domestic wholesale sales are still declining YoY, and the transition to second-generation Blade Batteries has caused temporary delivery delays.

  Comparison

  The report places BYD's in-house chip strategy alongside those of NIO, XPeng, Li Auto, and other automakers, believing that in-house chips have become an important direction in competition for advanced intelligent driving.

  Risks

  Battery capacity ramp-up slower than expected, weaker-than-expected conversion of new-car orders, weak domestic demand, slowing overseas growth, and slower-than-expected commercialization of intelligent driving.

• BYD 002594.SS

  A-share mapping of the same issuer

  Strengths

  Fundamental drivers are consistent with BYD's Hong Kong shares, including sales, orders, battery, and intelligent driving progress.

  Weaknesses

  Valuation, liquidity, and investor base may differ from those of Hong Kong shares.

  Comparison

  The report's disclosed rating and target price apply to 1211.HK and cannot be directly equated to an A-share target price.

  Risks

  A-share price performance may be affected by local market risk appetite, valuation systems, and sentiment toward RMB-denominated assets.

Key data

• June group wholesale sales403,472 unitsUp 5% YoY and 5% MoM.
• June overseas sales175,349 unitsUp 95% YoY and 9% MoM, setting another record high.
• June domestic wholesale sales228,123 unitsDown 22% YoY and up 2% MoM; the MoM improvement is related to the start of Datang SUV deliveries.
• Second-quarter group wholesale sales1,108,048 unitsDown 3% YoY and up 58% MoM.
• Estimated June new ordersAbout 291,000 unitsUp 53% MoM; weekly orders were about 47,700, 45,700, 106,800, and 70,600 units.
• Datang SUV order backlogMore than 70,000 unitsThe report describes these as non-cancellable orders, with a delivery waiting period of more than three months.
• Second-quarter net profit forecastRMB 10 billionExpected to increase 145% QoQ.
• Second-generation Blade Battery capacity planAdd capacity related to about 30,000 vehicles per monthBattery supply shortage is expected to be fully resolved by the end of the third quarter.
• Third- and fourth-quarter sales forecast1.4 million units, 1.7 million unitsThe report expects full-year 2026 sales of 4.9 million units, up 6% YoY.
• Xuanji A3 chip computing power informationMore than 2,100 TOPS in a three-chip clusterBuilt on a 4nm process, with a 16-core CPU and memory bandwidth of up to 273GB/s; the report says power consumption is 20% lower than competing products.
• Target price and current priceHKD 127.50 / HKD 72.45The current price is as of June 30, 2026, implying upside of about 76%.

Impact & implications

If the report's judgment materializes, BYD's investment thesis in the second half of the year will shift from a simple sales recovery to a combined driver of overseas expansion, realization of new-model orders, recovery in battery supply, and intelligent driving technology upgrades. In the short term, Datang SUV deliveries and the ramp-up of second-generation Blade Battery capacity will determine whether orders can be converted into revenue; in the medium term, strong overseas sales growth and progress with the Xuanji A3 chip may improve market recognition of BYD's valuation in globalization and intelligence.

Risks

• June domestic wholesale sales fell 22% YoY, indicating that demand in mainland China remains under pressure.
• The supply transition of second-generation Blade Batteries has caused delivery waiting times of one to two months; if capacity ramp-up falls short of expectations, it may limit sales realization.
• The Datang SUV order backlog needs to be converted into actual deliveries and revenue; if deliveries are delayed or demand cools, earnings forecasts will weaken.
• Strong overseas sales growth was the main driver in June; if overseas channels, tariffs, competition, or the regulatory environment change, the sustainability of growth is uncertain.
• Although the Xuanji A3 chip has strong specifications, its L3 and L4 intelligent driving capabilities still require validation through mass-production application and the regulatory environment.
• The report discloses that Deutsche Bank has service and investment banking relationships with the company, and investors should pay attention to potential conflict-of-interest disclosures.

What to watch

• Subsequent monthly delivery volume of the Datang SUV, changes in order backlog, and waiting periods.
• Whether overseas sales can continue to maintain strong YoY growth and contribute higher-quality earnings.
• Whether the monthly added capacity of second-generation Blade Batteries is delivered as planned, and whether shortages truly ease by the end of the third quarter.
• Whether actual second-quarter net profit is close to the RMB 10 billion forecast, and whether operating leverage materializes.
• Progress toward achieving the third-quarter sales forecast of 1.4 million units and the fourth-quarter forecast of 1.7 million units.
• The pace of Xuanji A3 chip installation in mass-produced models, rollout of advanced intelligent driving functions, and user experience feedback.