"BYD, Stock Volatility Expected to Increase Until Lockdown Lifted in Xi'an, China"

Concerns Over Earnings Slowdown
Stock Price Plummets 18% in One Month

[Image source=AP Yonhap News]

[Asia Economy Reporter Minji Lee] There are opinions that BYD's stock price volatility will further increase if the lockdown in Xi'an, China, is prolonged.

Looking at BYD's stock price on the 8th, it shows a sharp drop of 18% over the past month (December 8, 2022, to January 7, 2023), standing at 246.50 yuan. It is analyzed that concerns about performance due to the lockdown of the Xi'an factory, where half of the finished vehicles are produced, have been reflected in the stock price.

In December last year, BYD announced that it sold 94,000 electric vehicles (passenger cars and commercial vehicles), an increase of 226% compared to the same period last year. The annual electric vehicle sales last year reached 604,000 units, slightly exceeding the target of 600,000 units, but due to the city lockdown in Xi'an caused by the resurgence of COVID-19 in late last month, sales did not reach the expected volume of over 100,000 units.

BYD's Xi'an factory mainly produces DM-i series models such as Qin Plus DM-i and Song DM-i. Due to production and transportation disruptions caused by the Xi'an lockdown order, December's plug-in hybrid electric vehicle (PHEV) sales increased by only 1% compared to the previous month, showing a significant slowdown in growth compared to previous months (September 12%, October 15%, November 13%). Baek Seung-hye, a researcher at Hana Financial Investment, said, "Considering the Xi'an factory's annual production capacity (600,000 units), it is estimated that wholesale sales decreased by about 10,000 units in December."

Xi'an, China, is marking the 17th day of lockdown as of the 8th. As of the previous day, the number of new confirmed cases in Xi'an was 56, managed below 100. Earlier, Xi'an city announced that it would gradually lift lockdown measures in areas meeting the release conditions, and locally in China, it is expected that if the COVID-19 spread in Xi'an calms down by mid-month, control could be achieved by late this month.

However, with the Beijing Winter Olympics approaching in February, there is also a possibility that the lockdown measures will be prolonged. Researcher Baek Seung-hye explained, "BYD mentioned earlier this month that the main production facilities at the factory, which were partially affected by the Xi'an lockdown order, are operating normally, but January sales are expected to be sluggish," adding, "The duration of the Xi'an lockdown and the intensity of controlling the resurgence are variables affecting BYD's performance, so caution is needed regarding increased stock price volatility until the Xi'an lockdown is lifted."

This content was produced with the assistance of AI translation services.