STOCKS | Morgan Stanley Says BYD Selloff May Reflect Policy, Tariff Risks

Morgan Stanley said BYD's post-earnings share decline was sharper than the broader pullback in China's auto sector and may have been driven more by policy and geopolitical risks than by the results themselves, according to ETNet. The broker said the earnings were broadly in line with market expectations, with investors focusing on operating expenses, foreign-exchange moves and asset impairments to assess the sustainability of second-half profit. It also said market expectations for BYD's overseas sales this year have risen to more than 1.8 million vehicles, while monthly export sales are expected to stay above 180,000 units and domestic sales should edge higher on increased battery supply and a healthy order backlog. Morgan Stanley kept an Overweight rating on BYD and set a target price of HK$121, saying valuation pressure may ease as the market moves toward 2027 earnings forecasts, with more contribution from new models and steady overseas growth.