BYD Co. Ltd

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

BYD Co. Ltd (OTC: BYDDY) is a China-based manufacturing company primarily engaged in transportation equipment, with a core focus on new energy vehicles (NEVs). Its operations also span mobile phone components and assembly, secondary rechargeable batteries, and photovoltaic products. The company markets passenger vehicles under the “Dynasty” and “Ocean” series and operates across both domestic and international markets.

Kalkine’s Dividend Income Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Price Performance:

• The stock is trading at USD 12.63, hovering around the 20-day and 50-day moving averages, indicating short-term consolidation rather than a strong directional move.
• The broader trend remains corrective after the prior peak near USD 20, with price action forming a potential base around the USD 11.2–12.0 support zone.
• The RSI (~58) reflects neutral-to-moderately positive momentum, suggesting improving strength but not overbought conditions.
• Trading volumes remain relatively muted, indicating limited strong accumulation and confirming the current range-bound structure.

1.2 The Key Positives, Negatives, and Investment summary   

1.3 Stable Yet Modest Dividend Profile Reflecting Growth Orientation:

BYD’s dividend yield history underscores its positioning as a growth-focused enterprise with a conservative and disciplined payout approach. The yield has generally remained at modest levels, reflecting management’s priority toward reinvestment in expansion, technology, and capacity rather than aggressive cash distribution. Variations in dividend yield appear largely driven by share price movements—compressing during periods of strong stock appreciation and expanding during price corrections—rather than significant shifts in dividend policy. Overall, the company maintains a stable and consistent distribution pattern, with dividends serving as a complementary component of shareholder returns rather than the primary investment proposition.

1.4 Key Metrics

Broad-Based Margin Compression Amid Competitive and Investment Cycle

The decline across gross margin, EBITDA margin, operating margin, pretax margin, net margin, and ROE in Q3FY25 compared to Q3FY24 reflects a combination of competitive pricing pressure in the NEV segment and elevated cost intensity linked to expansion initiatives. Increased R&D spending, higher employee and material costs, and scaling-related overheads likely compressed operating leverage, while a growing equity base diluted return ratios. Additionally, working capital build-up and capacity investments may have weighed on short-term efficiency, indicating that the moderation in profitability aligns with an investment-driven growth phase rather than structural weakness.

Operating Cash Flow Resilience Amid Elevated Capital Outlay and Gradual Liquidity Improvement

On the liquidity standpoint, the chart reflects relatively stable operating cash flow generation across quarters, with Q3FY25 showing recovery versus earlier fluctuations, indicating that core operations continue to generate meaningful cash despite earnings moderation. However, free cash flow remains negative and has widened in Q3FY25, primarily due to significantly higher capital expenditure associated with capacity expansion, technology upgrades, and vertical integration initiatives. Increased investment in construction in progress and production scaling likely absorbed a substantial portion of operating inflows. Meanwhile, the gradual improvement in the current ratio—from 0.71 to 0.87—suggests strengthening short-term liquidity, supported by higher cash balances and working-capital management. Overall, the divergence between stable operating cash flow and negative free cash flow signals an investment-heavy phase rather than operational weakness, with liquidity gradually improving despite aggressive capital deployment.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

 2.2 Insights of 9M FY25:

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary:

4.1 Technical Summary:

 Price Performance:

• The stock is trading at USD 12.63, hovering around the 20-day and 50-day moving averages, indicating short-term consolidation rather than a strong directional move.
• The broader trend remains corrective after the prior peak near USD 20, with price action forming a potential base around the USD 11.2–12.0 support zone.
• The RSI (~58) reflects neutral-to-moderately positive momentum, suggesting improving strength but not overbought conditions.
• Trading volumes remain relatively muted, indicating limited strong accumulation and confirming the current range-bound structure.

4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is February 25, 2026. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.