STOCKS | BofA Raises BYD Target Price To HK$124 After Q2 Results

Bank of America kept its Buy rating on BYD and raised its target price from HK$123 to HK$124 after the automaker reported second-quarter results on August 28, according to ETNet. BYD said second-quarter revenue fell 3% year on year but rose 30% quarter on quarter to RMB 195 billion, supported by sales of 1.1 million vehicles. Gross margin was 18.9%, up 2.6 percentage points from a year earlier and 0.1 percentage point from the previous quarter. Operating expenses as a share of sales fell to 13.5%, while financial expenses reached RMB 3 billion, compared with financial income of RMB 1.3 billion a year earlier, mainly due to about RMB 2.6 billion in foreign-exchange losses. Net income rose 30% year on year and 102% quarter on quarter to RMB 8.2 billion, slightly above the bank's estimate. For the first half of 2026, BYD's total R&D spending reached RMB 28.9 billion, with an R&D capitalization ratio of 19.2%, compared with 4.2% in the first half of 2025 and 12.8% in the second half of 2025. Based on BYD Electronic's second-quarter profit of RMB 399 million, Bank of America estimated BYD's profit from non-consumer-electronics businesses would rise 42% year on year to RMB 8 billion. It also estimated second-quarter net profit per vehicle at about RMB 7,200, up 47% year on year and 24% quarter on quarter.