BYD's In-House Chip Push and Export Boom Fuel Citi's Bullish Profit Call
03.06.2026 - 19:21:53 | boerse-global.de
The Chinese electric-vehicle maker is stitching together a narrative that goes well beyond car sales. After eight months of declining deliveries, BYD finally eked out a 0.3 percent year-on-year gain in May to 383,453 new energy vehicles — and that modest uptick has emboldened analysts at Citi to forecast a second-quarter net profit of 10.3 billion to 12.4 billion yuan, well above the market consensus of 8 billion to 9 billion yuan. The optimism rests on a sequential jump of 19.4 percent from April and a record export month that saw 160,644 units shipped abroad, representing over 40 percent of total volume and an 80 percent surge from a year earlier.
Yet the stock has struggled to hold gains. Shares rose 4.55 percent on Tuesday only to slide 2.68 percent the next day to €10.25, leaving the equity nearly 78 percent below its 52-week high of €46.39. The volatility reflects a market that is weighing the promise of technological independence against persistent margin pressure at home.
That independence took concrete form on May 28, when BYD unveiled the Xuanji A3 — billed as China's first 4-nanometer automotive-grade chip. Designed for Level 3 and Level 4 autonomy, the processor sits at the heart of the company's "God's Eye" platform and its "Full Damage Coverage" safety philosophy. To drive the strategy, the group has assembled a team of roughly 7,000 chip engineers and invested over 100 billion RMB in smart-vehicle R&D. Talks are also under way with Samsung Foundry about producing even more advanced 2-nm and 4-nm semiconductors, a move that would further reduce reliance on Nvidia and other external suppliers.
Should investors sell immediately? Or is it worth buying BYD?
The logic extends beyond the car. BYD has taken a stake in PaXini Perception, a specialist in haptic sensors and humanoid robotics that is developing the "Tora" robot and preparing for a Hong Kong listing. The idea is to repurpose the company's battery and chip-control know-how into "embodied AI" — systems that can physically interact with the world — and eventually open revenue streams outside the automotive sector.
For now, though, the core business remains a tale of two markets. Domestic sales are still mired in a fierce price war: first-quarter net profit collapsed 55 percent, and the home market is the main drag. The rescue is coming from abroad. In the first four months of 2026, new registrations in the EU, EFTA and UK topped 100,000 vehicles, a near-144 percent increase. For the full year, BYD targets total sales of 3.5 million to 4 million vehicles, with exports playing an ever-larger role.
Goldman Sachs sees the first-quarter profit trough as a turning point, arguing that margins will recover as higher-priced export models gain share and efficiency improvements from in-house chip production kick in. The stock's forward price-to-earnings ratio of roughly 29 is historically moderate — but it presupposes that BYD's technological leaps translate into market share and earnings.
A potential near-term catalyst is the second-generation Blade Battery, which promises a range of more than 1,000 kilometers and a 10-to-70 percent charge in just five minutes. No launch date has been set, but expectations are high. The second-quarter earnings report, due in August, will provide the first real test of whether Citi's profit forecast is prescient — or whether the market's caution is justified.
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