Iran War "Safe Harbor": BYD surged in March, and electric vehicle stocks became one of Hengke's best performers

Rising oil prices reshape EV investment logic, with BYD’s Hong Kong stocks surging in March to their best performance in over a year, as overseas markets become the core driver boosting valuations.

The oil price shock triggered by the Iran conflict is unexpectedly catalyzing China’s EV sector. BYD’s Hong Kong stocks rose a total of 8% in March, making it one of the best-performing stocks in the Hang Seng Tech Index alongside NIO and Leap Motor. Previously, this sector had been under pressure for months due to weak domestic demand and ongoing price wars.

The strong momentum in overseas markets is a key support for this rebound. BYD’s overseas sales in the first two months of this year surged 50% year-over-year, with dealer traffic in Asian markets like the Philippines and Indonesia significantly rebounding. Meanwhile, orders from Central and South America have also surged.

Investors are focusing on the earnings report and full-year guidance to be released this Friday to assess the sustainability of the export-driven recovery.

Oil Price Shock Reignites Overseas Demand

The conflict involving Iran has pushed international oil prices higher, directly stimulating consumer willingness to buy EVs in emerging Asian markets. According to Bloomberg, queues of consumers purchasing EVs have appeared in the Philippines and Indonesia.

Leonid Mironov, portfolio manager at Gavekal Capital Ltd., said, “In the long run, this will help rebuild the EV market narrative and consumer perception, especially in developed markets.”

Rosalie Chen, analyst at Third Bridge, pointed out, “Overseas expansion has become an inevitable choice for Chinese automakers.” She believes that BYD’s cost advantage from self-produced batteries enables it to achieve strong profitability in exports, and to ‘effectively capture the demand shift driven by rising oil prices.’

Last year, BYD delivered 1.05 million units overseas, and the company has set a target to sell 1.3 million units outside China this year. If its self-developed new fast-charging technology can be implemented in overseas markets, it could further address the two key bottlenecks: charging speed and infrastructure shortages.

Bull-Bear Divergence Worsens, Rebound’s Sustainability in Doubt

However, market divergence on BYD is widening. According to S&P Global data, short positions account for 3.2% of free float, up from 0.7% at the start of the year, indicating increased bearish bets and reflecting some investors’ doubts about the rebound’s sustainability.

Meanwhile, the bullish camp is also accumulating. Kevin Net, head of Asian equities at Financiere de L’Echiquier, said that BYD’s strong stock performance is driven by market expectations of new model launches, new technologies, and most importantly — the continued positive momentum in overseas markets supporting this year’s sales recovery.

Bank of America analyst Ming Lee believes BYD’s products are gaining recognition overseas, but the company also needs to prove it can maintain its domestic market share. “After recent technology launches, store foot traffic has increased, but we are still waiting for clearer signals of sustained order recovery.”

Currently, BYD’s stock remains over 30% below its all-time high set in May last year. This Friday’s earnings release and full-year guidance will be critical in determining whether this rebound can develop into a sustained trend.

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