- RE-ITERATE BUY Entry 220 – Target – 240 Stop Loss – 210
- 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.
- 1Q22 performance review. Revenue from operations jumped by 63.0% YoY to RMB66.8bn. Net profit attributable to shareholders jumped by 240.6% YoY to RMB808.4mn. The stellar performance was due mainly to the growth of the industry of new energy vehicles.
- Policy to uphold EV consumption. On 25th April, China unveiled guidelines to further tap the country’s consumption potential. One of the guidelines will promote the sales of automobiles, especially EVs in the country’s rural areas.
- 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.
- Updated market consensus of the EPS growth in FY22/23 is 116.3%/58.6% YoY respectively, which translates to 83.5×/52.6x forward PE. Current PER is 152.2x. Bloomberg consensus average 12-month target price is HK$328.34.
(Source: Bloomberg)