Data indicates a significant decline in short interest for BYD's (BYDDF, Financial) Hong Kong-listed shares, dropping from 7.7% earlier this year to 0.9%, nearing the lowest level since July 2022. This shift occurs as the market anticipates BYD's third-quarter revenue to reach 204.8 billion yuan, potentially setting a record high and exceeding Tesla's $25.2 billion.
In anticipation of BYD's earnings report, short sellers have notably reduced their positions. According to S&P Global Inc., the short interest in BYD's Hong Kong shares has decreased significantly, and the cost to hedge against price drops in the options market has also fallen.
BYD is set to release its financial results, with market expectations of third-quarter sales reaching 1.1 million new energy vehicles and revenue of 204.8 billion yuan (approximately $28.7 billion). This would mark a new high and surpass Tesla's revenue for the same period. Since its low in February, BYD's Hong Kong shares have rebounded by over 70%.
Analysts suggest BYD's overseas sales performance will be crucial for further stock price increases. Morgan Stanley analysts, including Tim Hsiao, note investors are likely to focus on BYD's high-end brands and international sales to see if they can drive sales and profit growth in the fourth quarter.
BYD's overseas sales for the first nine months reached around 300,000 units, some distance from its 450,000-unit target. To achieve this, BYD must increase its average monthly overseas sales to 51,000 units in the fourth quarter—a 54% rise from the 33,000-unit average in the first nine months. ASEAN and Brazil are critical markets for reaching this target, with Brazil accounting for 30%-35% of BYD's overseas sales, Thailand around 15%, and Indonesia rapidly becoming the third-largest market.
