BYD could not benefit from the good conditions on the Chinese stock market on Tuesday

Competition sends unpleasant signals

Markets in China have recovered in the past few days. At the beginning of the week there was already a big increase in the Hang Seng and analysts continued to encourage positive trends. The perception is gaining ground that the worst may be over and things can only go up from here.

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This also gave many green signals on Tuesday WORLD (CNE100000296) However, unfortunately it was not considered. Instead, shareholders here had to watch as the share price fell 2.3 percent to a paltry $25.14. This may also have something to do with competition.

A few days ago, Tesla announced further price cuts, including for the Chinese market. This is a clear sign that the electric car price war in the Middle Kingdom is far from over. BYD is firmly positioned for this. However, the prospect of narrowing margins is not something that would put stock market investors in buying mode.

There is still no direct response from BYD. However, the markets are more or less certain that this will not be long in coming. What is missing, however, are signs of change in China’s massive auto market.

BYD: Doubts remain

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Yesterday after the market closed, Tesla presented first quarter figures that were not good. General Motors was more persuasive, but also had to deal with restrictions in China. For BYD, there are no bright spots that can give hope of an early stop to the downward trend. Unfortunately, the generally positive outlook on Chinese markets will do little to change this.

24.04.2024 – Andreas Göttling-Daxenbichler

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