Sunday, April 27th, 2025

BYD (1211 HK): Leading the EV Market with Expanding Sales

BYD (1211 HK): Leading the EV Market with Expanding Sales

Recommendation: HOLD

  • Target Price: HK$220.00
  • Date of Recommendation: September 9, 2024
  • Broker Company: UOB Kay Hian

Investment Thesis:

BYD continues to outperform in the electric vehicle (EV) market, with insurance registrations exceeding expectations. The company’s robust domestic sales, expanding international presence, and diversified product lineup, including electric cars and batteries, highlight its market dominance. However, the hold recommendation stems from concerns about valuation, with the stock trading close to its target price.

Key factors supporting the investment thesis include:

  • Strong Sales Performance: In the 35th week of 2024, BYD’s insurance registrations grew by 72% year-on-year (yoy) to 91,800 units, surpassing estimates. Year-to-date (YTD) registrations have reached 2.05 million units, in line with the company’s 2024 domestic sales target of 3.6 million units.
  • Export Growth: BYD’s export volume surged 125% yoy to 264,869 units in the first eight months of 2024, reflecting the company’s expanding footprint in international markets.
  • Profit Forecast: The company’s net profit for 2024-2026 is projected at RMB37.07 billion, RMB37.54 billion, and RMB38.87 billion, respectively. These forecasts are based on sales volumes of 4.0 million, 4.5 million, and 5.0 million units.

Financial Performance:

  • Wholesale Shipments: BYD’s wholesale shipments grew by 36% yoy to 373,083 units in August 2024, bringing the YTD total to 1.96 million units, aligning with the full-year target of 4 million units.

Valuation and Catalysts:

The target price of HK$220.00 is based on BYD’s strong sales momentum and expansion into international markets. However, the stock’s high valuation warrants a cautious approach, justifying the hold recommendation.

Thank you

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