Profit alert: anticipate a sharp increase in 1H22 net earnings (above expectation)
- BYD expects 1H22 net earnings to increase by 138-206% yoy; largely driven by its strong NEV business
- Total vehicle sales surged about 160% yoy in 1H, of which NEV at over 300% expansion
- Better revenue mix helped to drive profitability
- Maintain BUY with HK$380 TP
What’s new
BYD announced its interim net earnings to range between Rmb2.8bn and Rmb3.6bn, translating to growth of 138-206% growth. The strong performance is above expectation.
Strong NEV sales and better revenue mix helped to drive profitability.
Total vehicle sales surged about 160% yoy in 1H, of which NEV at over 300% expansion to about 641,000 units. During the year, BYD has launched several new models to boost sales.
We reiterate our BUY rating with HK$380 TP. The share price was under pressure recently after news of potential selling by its strategic partner, Berkshire Hathaway. Re-entry opportunity arises after the recent sharp correction.