- RE-ITERATE BUY Entry 237 – Target – 270 Stop Loss – 220
- BYD COMPANY LIMITED is a China-based company principally engaged in the manufacture and sales of transportation equipment. The Company is also engaged in the manufacture and sales of electronic parts and components and electronic devices for daily use. The Company’s products include rechargeable batteries and photovoltaic products, mobile phone parts and assembly, and automobiles and related products. The Company mainly conducts its businesses in China, the United States and Europe.
- First combustion engine car maker to go full EV production. The company announced that as of last month it stopped making combustion engine vehicles and only produced electric and hybrid vehicles. Moving forward, BYD will be the domestic largest pure EV company. The implication is that the valuation for the company will be elevated as the combustion engine car segment will no longer drag the company.
- March production and sales volume. As the 1Q22 production and sales volume shows below, the company’s strategic move to go pure electric and hybrid vehicle production is in line with the mainstream trend, especially with oil prices staying firmly at above US$100/bbl.
Updated market consensus of the EPS growth in FY22/23 is 145.8%/51.1% YoY respectively, which translates to 75.3×/49.9x forward PE. Current PER is 187.1x. Bloomberg consensus average 12-month target price is HK$329.48.