BYD Company Limited heads into a difficult June with its stock down nearly 9% on the week — yet short sellers are quietly covering rather than pressing the bet.
The most striking feature of this week's data is the divergence between price and positioning. BYD closed at HK$88.40, off 11% over the past month, but short interest fell almost 10% over the same seven-day period to 6.95% of the free float. That drop — from roughly 284 million shares short at the start of June to 256 million — is the sharpest weekly decline in the 30-day window. It suggests bears are taking profits into the weakness rather than adding to what was already a meaningful position. Borrow conditions offer no drama: cost to borrow has barely moved, holding just above 1% annually, and availability has actually loosened sharply this week — rising from around 360% to nearly 500% — meaning there are roughly five shares available to borrow for every one already lent out. That is well within the normal range and nowhere near the tight lending conditions that would flag a potential squeeze. The ORTEX short score has drifted down from above 60 in late May to 57.8 now, reinforcing the picture of modest short-side retreat.
The Street's read on valuation provides a useful counterweight to the price action. The consensus price target of HK$107.57 sits about 22% above the current price, and the analyst recommendation differential ranks in the 93rd percentile of the ORTEX universe — meaning the sell-side is more constructively positioned on BYD relative to peers than on almost any other name. The PE multiple has compressed to around 16x, down from roughly 19x a month ago, while the price-to-book has pulled back to 2.3x. That re-rating tracks the stock's monthly decline almost exactly. EV/EBITDA is running at about 5.2x — not a stretched multiple for a company that just reported first-half deliveries up 41% year-on-year. The dividend score ranks in the 85th percentile, though the most recent dividend data is from 2022 and should be treated with caution as current context.
Institutional ownership tells its own story. Founder Chuan-Fu Wang holds 17% and has not moved his position. Berkshire Hathaway's 1.79% stake, last reported as of September 2024, has shown no change — the filing predates the current sell-off and offers no fresh read on Buffett's conviction. FMR (Fidelity) added nearly 9.4 million shares as of late May, the largest recent institutional add in the register. BlackRock added a modest 687,000 shares over the same period. The insider log is dominated by JPMorgan's regulatory filings as a 5% owner — routine buy-sell activity that reflects index-related flows rather than directional conviction.
Peers have had an equally rough week. NIO fell 12% and XPEV dropped 13% over the same period, suggesting the pressure on BYD is sector-wide rather than stock-specific. The broader China EV complex is repricing together, though BYD's relative resilience — down 9% versus double-digit declines at the pure-play names — may reflect its more diversified revenue base and domestic market dominance.
The next scheduled catalyst is the August 27 earnings release. The recent print history is modestly negative on day one — the May result produced a 4% one-day drop — but the five-day reaction has been more contained. With short interest retreating, availability loose, and the sell-side firmly constructive, the setup into that print will depend on whether the delivery momentum flagged in June's first-half numbers translates into margin improvement that the current 16x multiple can support.
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