BYD reports robust overseas growth amid domestic headwinds

BYD's overseas expansion is becoming a buffer against a tougher home market, as the Chinese new energy vehicle maker's latest interim results reveal a sharp divide between global momentum and pressure on domestic performance.

The Shenzhen-based new energy vehicle maker posted first-half revenue of 344.82 billion yuan ($48.5 billion), down 7.1 percent year-on-year. Net profit attributable to shareholders fell 20.5 percent to 12.33 billion yuan, its first interim decline in six years.

However, profitability did not weaken across the board. Gross profit fell 2.8 percent year-on-year to 64.99 billion yuan, but the gross margin widened to 18.85 percent from 18.01 percent, mainly driven by growth in overseas new energy vehicle sales. Operating cash flow also rose to 37.34 billion yuan from 31.83 billion yuan, showing stronger cash generation despite the decline in reported earnings.

Much of that resilience came from overseas markets, which the company described as "a core growth driver" of its high-quality development. Overseas revenue climbed 33.9 percent to 181.27 billion yuan, accounting for 52.6 percent of the total and overtaking revenue from the Chinese market during the period. Exports surged 67.8 percent to 792,000 vehicles, close to 44 percent of BYD's 1.81 million new energy vehicle sales.

At home, the picture was harder. Revenue from China, including Hong Kong, Macao and Taiwan, dropped 30.7 percent to 163.55 billion yuan amid softer demand and fierce industry competition. BYD said the profit decline mainly reflected weaker new energy vehicle business and foreign-exchange losses. Rising commodity, raw-material and chip prices added to the strain.