FINANCE

Analysis: Yuan Rally Exposes Currency Risks for Chinese Companies Expanding Overseas

Published: May. 11, 2026 5:52 p.m. GMT+8

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A stronger yuan is eroding the earnings of Chinese exporters, with major companies including BYD Co. Ltd. (002594.SZ) reporting large foreign-exchange losses.

The yuan’s rapid appreciation has increased pressure on export-heavy firms with large foreign-currency assets.

BYD reported a foreign-exchange loss of roughly 2.1 billion yuan ($304 million) in the first quarter, compared with a gain of about 1.9 billion yuan a year earlier, sharply reducing net profit.

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Stronger yuan causes FX losses for exporters; BYD Q1 loss 2.1B yuan ($304M) vs prior 1.9B gain, cutting profit.
Linglong Tyre Q1 net profit drops 95% despite revenue rise, due to 267M yuan FX losses.
70% listed firms have overseas revenue; losses mostly unrealized, hedging up but costs deter many.

AI generated, for reference only

Who’s Who

BYD Co. Ltd.: BYD Co. Ltd. (002594.SZ) reported a Q1 foreign-exchange loss of 2.1 billion yuan ($304 million), vs. a 1.9 billion yuan gain a year earlier, due to yuan appreciation, sharply reducing net profit.

Shandong Linglong Tyre Co. Ltd.: Shandong Linglong Tyre Co. Ltd. (601966.SH) saw first-quarter net profit plunge 95% year-over-year, despite revenue growth, after recording 267 million yuan in foreign-exchange losses from the yuan's appreciation.

AI generated, for reference only