<Results First Take> BYD (1211): 1H22 net earnings in line with company positive profit alert
- Total revenue climbed 66% y-o-y to about Rmb151bn, largely driven by higher contribution from the auto segment. Auto revenue rose 130% to Rmb109bn, supported by a 169% surge in total vehicle sales
- Average GP margins improved 0.75ppt y-o-y to 13.5% and total gross profit increased by 75% to Rmb20bn
- 1H22 net earnings increased by 206% to Rmb3.6bn, upper range of profit alert
- We currently have BUY rating with HK$380 TP
What’s new
Interim total revenue climbed 66% y-o-y to about Rmb151bn, driven by higher contribution from the auto segment. Auto revenue rose 130% to Rmb109bn, supported by a 169% surge in total vehicle sales.
During the period, NEV sales surged 315% in 1H to about 641k units. And by 7M22, total volume sales have exceeded FY21 by 33%. BYD share of the NEV market rose to 24.7%, up 7.5ppts.
Several of BYD’s key NEV models have been selling well in the market, such as its Han EV, Qin Plus and Song DM, boosting its sales outlook. Besides, the company has also expanded its product offerings under the marine series, including Dolphin and Seal. Better vehicle mix is the key volume driver as the company constantly upgrade its vehicle portfolio to enhance market position
Average GP margins improved 0.75ppt y-o-y to 13.5% in 1H. However, due to raw material price hikes. auto segment GP margin slipped 1.7ppts to 16.3%. As a result, total gross profit by 75% to Rmb20bn.
1H22 net earnings increased by 206% to Rmb3.6bn. In fact, its quarterly profit has been trending up since 4Q21 and 2Q22 net profit of about Rmb3bn is the best quarter and represents about 233% expansion from a year ago.
We currently have BUY rating with HK$380 TP. BYD’s share price has been unexciting recently, attributable to concerns of potential divestment by Berkshire Hathaway, its largest H-share holder.