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

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.