Profit alert: Strong net earnings anticipated for 3Q22; growth of 333.6-365.1% y-o-y, above expectation
- BYD’s net earnings for 3Q22 is expected to increase by 333.6-365.1% y-o-y; riding on the upward trend of NEV in China
- Total vehicle sales surged 164% y-o-y in 9M22, while NEV had y-o-y increase of about 250%
- Better cost control and adjustment in product mix brought improvement to profitability
- Maintain BUY with HK$380 TP
BYD announced 3Q22 net earnings to be between Rmb5.5bn and Rmb5.9bn, translating to a growth of 333.6-365.1% y-o-y despite unfavourable macro environment in China.
9M22 earnings is expected to be between Rmb9.1bn and Rmb9.5bn, representing y-o-y growth of 272.5-288.9%.
Although there were rising raw material prices, BYD managed to improve profitability by having good cost control capability and product mix adjustment.
Total vehicle sales expanded 164% y-o-y in 9M22, with NEV rising 250% to approximately 1,180,000 units. BYD will be launching new models in 4Q22 in both China and Europe market.
We maintain our BUY rating with HK$380 TP. BYD’s advanced technology in EV batteries and chip is advantageous for the company’s further NEV expansion.