On the eve of the "historic" financial report, BYD sees a major short interest exodus

Before BYD's third-quarter report, short sellers significantly reduced their short positions.

According to data from S&P Global Inc., the short interest in BYD's Hong Kong shares has decreased from 7.7% earlier this year to 0.9% last Friday, approaching its lowest level since July 2022. At the same time, the hedging cost for price declines in the options market has also decreased.

BYD will announce its financial report today. Market expectations currently indicate that BYD's third-quarter sales of new energy vehicles reached 1.1 million units, with revenue of HKD 204.8 billion (approximately USD 28.7 billion), potentially setting a new historical high and surpassing Tesla's USD 25.2 billion.

BYD's Hong Kong shares have rebounded by over 70% from their low point in February.

Analysts believe that BYD's overseas sales performance will be crucial for further stock price increases.

Morgan Stanley analyst Tim Hsiao and others wrote in a report that investors are expected to gradually shift their focus to BYD's high-end brand and overseas sales to observe whether they can recover and drive sales and profit growth in the fourth quarter.

BYD's overseas sales in the first nine months of this year were approximately 300,000 units, still some distance from the target of 450,000 units.

Hsiao stated that to achieve the above target, BYD's average monthly overseas sales in the fourth quarter need to reach 51,000 units, which means a 54% increase from the average of 33,000 units in the first nine months of this year.

Hsiao believes that the ASEAN and Brazilian markets are crucial for BYD to achieve its overseas sales target. Brazil currently accounts for 30%-35% of BYD's total overseas sales, while Thailand accounts for around 15%, and Indonesia is rapidly becoming BYD's third-largest overseas market