Investors appear to be less pessimistic about BYD ahead of its earnings release on August 29.

The Chinese EV maker’s stock has dropped 28% since May, but options data shows a recent rise in bullish contracts compared to bearish ones

The cost of hedging against losses has also fallen from April highs.

Short interest in BYD shares has declined to 3.2% of shares available, down from nearly 7% at the end of July, according to S&P Global.

Market watchers are expected to focus on BYD’s average selling price and profit per vehicle to assess the impact of recent promotions.

BYD delivered 2.1 million vehicles in the first half of 2025 and aims to sell 5.5 million cars for the year.

Analysts note that overseas sales and currency shifts could influence the company’s results.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ BYD’s stock decline masks strong operational momentum ahead of earnings

Despite BYD’s shares falling 28% from their May peak, the company’s fundamental business metrics show robust growth that contrasts sharply with investor pessimism1.

Revenue surged 36.35% year-over-year to 170.36 billion CNY in the first quarter of 2025, while the company delivered 2.1 million vehicles in the first half of the year, putting it on track to meet its ambitious 5.5 million vehicle target for 202512.

This disconnect between stock performance and business results creates a situation where relatively modest positive earnings surprises could drive significant stock recovery, especially given that short interest has already dropped from 7% to 3.2% as the stock declined1.

The improving options sentiment, with bullish contracts near their highest levels relative to bearish bets since May 2024, suggests sophisticated investors are positioning for potential upside ahead of the results1.

2️⃣ European expansion success could be a major earnings catalyst

BYD’s remarkable European performance represents a potential earnings bright spot that many investors may be underestimating.

Recent BYD developments