Iran war "safe haven": BYD surged in March, tram stocks become one of Hengke's best

# Zhao Ying

Source: Wall Street News

Soaring oil prices have unexpectedly ignited China’s electric vehicle sector. BYD’s Hong Kong-listed shares surged 8% in March, posting their best monthly performance in over a year. The Iran conflict has driven up fuel prices, with consumers in the Philippines and Indonesia queuing to buy electric vehicles. Overseas sales jumped 50% year-on-year in the first two months, and the export story is reshaping its valuation potential.

Skyrocketing oil prices have rewritten the investment case for electric vehicles. BYD’s Hong Kong stock recorded its strongest monthly gain in more than a year in March, with overseas markets emerging as the core driver of its re-rating.

The crude oil price shock triggered by the Iran conflict is providing an unexpected catalyst for China’s EV sector. BYD’s Hong Kong shares rose 8% in March, ranking among the best performers on the Hang Seng Tech Index alongside NIO and Leapmotor. The sector had been under pressure for months due to weak domestic demand and price wars.

Strong momentum in overseas markets has been a key pillar of this rebound. BYD’s overseas sales surged 50% year-on-year in the first two months of this year, with a notable pickup in dealer foot traffic in Asian markets including the Philippines and Indonesia. Meanwhile, orders from Central and South America have also flooded in.

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

## Oil price shock reignites overseas demand

The Iran conflict has pushed international oil prices higher, directly boosting consumer appetite for electric vehicles in emerging Asian markets. According to Bloomberg, queues for EVs have appeared in the Philippines and Indonesia.

Leonid Mironov, portfolio manager at Gavekal Capital Ltd., said: “Longer term, this will help rebuild the market narrative and consumer perception of electric vehicles, especially in developed markets.”

Rosalie Chen, analyst at Third Bridge, noted that “overseas expansion has become an inevitable choice for Chinese automakers.” She believes BYD’s cost advantage from in-house battery production allows it to achieve strong profitability in exports and “effectively capture demand shifts driven by rising oil prices.”

BYD delivered 1.05 million vehicles overseas last year and has set a target of selling 1.3 million units outside China this year. If its self-developed next-generation fast-charging technology is rolled out abroad, it could further break through two key bottlenecks: charging speed and insufficient infrastructure.

## Bull-bear divergence widens, sustainability of rebound in doubt

However, market division over BYD is growing. According to S&P Global data, short interest as a percentage of free float has climbed to 3.2% from 0.7% at the start of the year, reflecting increased bearish bets and doubts among some investors over the durability of the rebound.

Still, bullish sentiment is also building. Kevin Net, head of Asian equities at Financière de L'Echiquier, said BYD’s strong stock performance reflects market expectations of a sales recovery this year driven by new model launches, new technology debuts, and most importantly, sustained positive momentum in overseas markets.

Ming Lee, analyst at BofA Securities, believes BYD’s products have gained recognition abroad, but the company also needs to prove it can defend its domestic market share. “Store traffic has picked up following recent technology launches, but we are waiting for clearer signs of a sustained order recovery.”

BYD’s share price remains more than 30% below its all-time high set last May. This Friday’s earnings release and full-year guidance will be a critical test of whether this rebound can turn into a trending market.

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