---
endpoint: analytics
pattern: Autos
status: done
latency_ms: 232203
conversation_id: 89071918-905a-4805-a732-4cde9dc21e90
citations: 9
created: 2026-05-31 21:51:21Z
---

# Is CLSA incrementally more positive/negative on BYD. If so, why?

## CLSA on BYD (1211 HK / 002594 CH) — Incremental view

**Bottom line: CLSA is NOT incrementally more positive. They are incrementally more cautious in the near term, while structurally maintaining their highest-conviction bull call.** The rating sits at **HIGH CONVICTION OUTPERFORM (HC O-PF)** with TPs of **HK$161 / Rmb484** (analyst Xiao Feng) — both rating and TP have been **unchanged since 10 March 2025** [2][3]. What has shifted is the tone, the title of the notes, and the explicit acknowledgement of 2Q profit pressure.

---

### The arc of CLSA's stance (recommendation history)

| Date | Rating | TP (HK$) — split-adjusted | TP (Rmb) |
|---|---|---|---|
| Oct 2022 | BUY | 100 | 250 |
| Apr 2024 | BUY | 88 | 275 |
| 28 Jun 2024 | O-PF | 88 | 275 |
| 7 Oct 2024 | O-PF | 126.67 | 382 |
| 7 Feb 2025 | **HC O-PF** (upgraded) | 147.67 | 446 |
| 10 Mar 2025 | HC O-PF | **161** | **484** |
| 25 Jun 2025 (latest) | HC O-PF | 161 (unchanged) | 484 (unchanged) |

Source: Recommendation history tables in latest BYD note [3].

CLSA was **incrementally bullish throughout 2024 and into early 2025** — they upgraded BYD to HC O-PF in Feb 2025 (their highest conviction tier) and raised the TP again on 10 March 2025 ("Double tailwinds"). Since then they have **held steady** for three months and the latest note continues that hold pattern.

---

### What CHANGED in the latest note ("BYD — Destocking initiated", 25 Jun 2025)

Compared to their May note ("More contributions from overseas"), the June note carries clear **incrementally cautious signals**:

1. **Title shift** — from "More contributions from overseas" (May 12) [6] → **"Destocking initiated"** (June 25) [1]. The June title is the first time in this cycle that the bull house-note frames the story around inventory reduction rather than growth drivers.

2. **Explicit 2Q profit warning** — "At the recent BYD dealer conference, dealer incentives emerged as c.**Rmb700m-Rmb800m** excluding exports and direct sales, **underperforming the market's expectation of Rmb1bn. This may impact 2Q profits.**" [1] — this is a fresh, dated negative caveat that did not appear in prior notes.

3. **Production load reduction acknowledged** — CLSA confirms BYD's monthly capacity is c.500k while output runs at only c.300k-400k, i.e. ~30% under-utilisation. They label the cut as "**not a total surprise**" given that gap [1].

4. **Stock action confirms the cooling** — BYD-H is **−16.2% over 1M (−17.9% relative to CEI)**, even as the 12M return is still +62.6% [4]. The unchanged TP against a falling share price means the implied upside has widened from +16%/+31% (May 12) [6] to **+24%/+39%** (June 25) [2] — but CLSA explicitly chose **not** to upgrade conviction off the weakness.

5. **No estimate upgrades** — 2025/26/27CL revenue and net profit projections are **unchanged** (25CL Rev Rmb986bn, NP Rmb60.6bn — identical to the May numbers) [5]. After ~6 weeks of choppy demand, they are not pushing numbers higher despite still being **9-15% above consensus** [5].

6. **Sector check confirms the slowdown** — CLSA's China Auto weekly-orders note (24 Jun) shows BYD orders "**mostly stable last week at c.80k against the backdrop of its large-scale price cuts in May**" — i.e. price cuts have stabilised, not re-accelerated, volumes [7]. Their own April channel-check had already flagged the drop from c.80k/week in March to c.70k/week in April [6].

---

### What STAYED bullish

CLSA still spins the production cut **positively for the stock**:

- "Overall, **the reduction in production load is helpful for BYD and the industry's efforts to reduce inventory overhang.** This should enable a move towards developing a sustainable distribution supply chain overall, according to the policy requirements announced on 10 June." [1][8]
- Investment thesis unchanged: "vertical integration model... visible overseas and high-end growth stories" [1]
- 2025 sales guide of 5.5m units (incl. ~800k exports) and 2H margin recovery to Rmb100-110k still embedded in their forecasts [9]
- Companies-mentioned tag still reads "**BYD (1211 HK – HIGH CONVICTION OUTPERFORM)**" [2]

---

### How to read it

**The signal is "incrementally more cautious, not less convicted."** CLSA has stopped raising estimates, started using destocking/inventory language, and warned on 2Q profitability — but they will not blink off HC O-PF because:
- The TP cushion has actually grown (now +24%/+39% vs +16%/+31% a month earlier) as the stock has corrected harder than thesis-impacting news warrants in their view,
- The structural drivers (vertical integration, overseas growth, intelligent-driving moat) are intact,
- They view the production cut as **industry-rationalising**, not BYD-specific demand destruction.

So if the question is "are they leaning *more* positive?" — **no.** If the question is "have they capitulated?" — **also no.** This is a classic sell-side **hold-the-call with a tone downgrade**: the rating box is unchanged, but the narrative box has clearly cooled.

---
**Sources**

[1] BYD (Destocking initiated) — CLSA, Xiao Feng / Ding Luo / Orlando Hong (25 Jun 2025) — 607962811LinqAlpha.PDF
[2] BYD (Destocking initiated) — Companies mentioned (HC O-PF rating block) — CLSA (25 Jun 2025) — 607962811LinqAlpha.PDF
[3] BYD (Destocking initiated) — Recommendation history table — CLSA (25 Jun 2025) — 607962811LinqAlpha.PDF
[4] BYD (Destocking initiated) — Stock performance table — CLSA (25 Jun 2025) — 607962811LinqAlpha.PDF
[5] BYD (Destocking initiated) — Financials at a glance — CLSA (25 Jun 2025) — 607962811LinqAlpha.PDF
[6] BYD (More contributions from overseas) — CLSA (12 May 2025) — 607959021LinqAlpha.PDF
[7] China Auto (Weekly orders remain stable) — CLSA (24 Jun 2025) — 607962719LinqAlpha.PDF
[8] All Things China (ATC Daily — BYD section) — CLSA (26 Jun 2025) — 607962831LinqAlpha.PDF
[9] BYD (More contributions from overseas) — Outlook / 2025 sales & margin guide — CLSA (12 May 2025) — 607959021LinqAlpha.PDF

## Citations

- [1] **607962811LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962811LinqAlpha.PDF>
- [2] **607962811LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962811LinqAlpha.PDF>
- [3] **607962811LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962811LinqAlpha.PDF>
- [4] **607962811LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962811LinqAlpha.PDF>
- [5] **607962811LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962811LinqAlpha.PDF>
- [6] **607959021LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607959021LinqAlpha.PDF>
- [7] **607962719LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962719LinqAlpha.PDF>
- [8] **607962831LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962831LinqAlpha.PDF>
- [9] **607959021LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/05/607959021LinqAlpha.PDF>

