BYD earnings may move the needle in market-cap fight with CATL

[HONG KONG] BYD’s earnings later Monday (Mar 24) could be the factor cementing the electric vehicle leader’s place as China’s most valuable non-state onshore stock.

For the first time this month, BYD’s market value surpassed that of Contemporary Amperex Technology Co, Limited (CATL), reaching 1.2 trillion yuan (S$221 billion) on Thursday. But a 7 per cent stock slump on Friday – BYD’s biggest since August 2022 – gave the No 1 position back to CATL. BYD now trades at about 20 times earnings for the next year, below its three-year average, and compares with almost 83 times for peer Tesla.

The plunge is a reminder of how vulnerable the shares are to regulatory and geopolitical risks. Before Friday, BYD was up more than 40 per cent this year, hitting a series of records as the company unveiled a slew of new models featuring technology upgrades in its battery system and smart-driving functionalities. Battery giant CATL, on the other hand, was slightly down, with a market value of about 1.1 trillion yuan.

As BYD and CATL fight for stock-market dominance, the carmaker’s earnings may make a difference. Investors will closely watch its targets for full-year sales and exports, as well as any update on how its aggressive pricing strategy is affecting profit per vehicle. Options traders are pricing in a 4.5 per cent move in the Hong Kong-listed stock after the release, more than the average fluctuation of 3 per cent following the last eight quarterly reports. BLOOMBERG