KUALA LUMPUR, March 10 (Bernama) -- Bursa Malaysia rebounded to end higher today with the benchmark FBM KLCI reclaiming the 1,700 psychological level, supported by improved global sentiment after US President Donald Trump signalled a potential de-escalation of the Iran conflict, alongside Malaysia’s stronger Industrial Production Index (IPI) data. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) increased 27.51 points, or 1.64 per cent, to 1,701.68 from yesterday’s close of 1,674.17. The benchmark index opened 10.68 points higher at 1,684.85, its lowest point today, and hit a high of 1,703.61 in the late afternoon session. Market breadth was positive, with gainers thumping losers 929 to 382. A total of 361 counters were unchanged, 982 untraded and 19 suspended. Turnover declined to 3.60 billion units worth RM3.75 billion from yesterday’s 5.52 billion units worth RM5.87 billion.
Shares of BYD Co Ltd (HKG:1211) fell sharply on Friday after China’s top electric vehicle (EV) maker reported a 33% drop in third-quarter net profit and weaker-than-expected revenue, underscoring the challenges even the industry leader faces in a highly competitive market.
Earnings Miss Triggers Stock Selloff
BYD’s Hong Kong-listed shares tumbled as much as 6.4% in early trading following the results released late Thursday.
Net income: 7.82 billion yuan (US$1.1 billion), down 33% YoY
Revenue: 194.98 billion yuan, down 3% YoY and missing analyst forecasts of 216 billion yuan
Gross margin: 17.6%, down from 21.9% a year ago but up from 16.3% in Q2
“Neutral to slightly negative” reactions are expected, according to Morgan Stanley, which estimated vehicle-unit profit at 6,100 yuan, below its 6,500 yuan projection.
Losing Momentum in China’s Price War
Once the undisputed market leader, BYD is now losing ground in China’s crowded EV space.
Vehicle deliveries in Q3: 1.15 million units, down 1.8% YoY
Competitors Geely and Changan posted sales surges of 96% and 84%, respectively
BYD also lost its title as China’s top-selling automaker to SAIC Motor in September
A prolonged price war has eroded margins across the industry, prompting Beijing to express concerns over product quality and financial sustainability.
Analysts Split on Near-Term Outlook
Despite weak earnings, some analysts see early signs of stabilization.
HSBC expects sequential improvements in Q4 on higher demand, better product mix, and stronger operating leverage.
Citigroup noted that BYD’s inventory levels fell in September, calling it a potential “de-stocking phase” that could pave the way for recovery.
“A de-stocked BYD could be loved by the market again if export growth strengthens in early 2026,” wrote Citi analysts led by Jeff Chung.
Global Expansion Gains Pace
While domestic sales lag, BYD’s overseas expansion remains robust, with exports up 160% YoY in Q3, driven by Europe and Latin America.
The company is investing heavily in R&D and preparing high-end model launches under its Yangwang and Fangchengbao luxury brands next year to lift margins.
Policy and Structural Headwinds
BYD could see a temporary boost in Q4 as China phases out EV subsidies and tax incentives, prompting a rush of year-end purchases.
However, the withdrawal of government support poses long-term risks by reducing affordability for mass-market buyers and intensifying price pressure on automakers.
Meanwhile, Beijing’s “anti-involution” campaign — aimed at curbing destructive price competition — has had limited success, leaving the sector still fragmented and profit-starved.
Investor Takeaway
BYD’s latest results reflect the growing cost of leadership in China’s EV industry. While its export momentum and margin recovery offer hope for stabilization, domestic headwinds and industry overcapacity remain significant risks.
Investors may want to monitor Q4 volumes and export mix closely for signs of a genuine turnaround as BYD repositions toward premium segments and global markets.
Comments
Post a Comment