20230703-招银国际-比亚迪股份-01211.HK-2Q23E_preview__net_profit_to_rise_7__QoQ_4页_835kb

BYD (1211 HK) Report Summary

Analyst: SHI Ji, CFA and DOU Wenjing, CFA
Date: 3 Jul 2023
Company: BYD Company (1211 HK) – Chinese automaker focusing on new energy vehicles (NEV).
Sector: China Auto Sector, part of broader market benchmark.

Key Highlights:

• Financial Performance (2023E): Net profit estimate revised up to RMB 22.8bn, a 4% increase from previous forecast. Q2 2023E net profit projected to grow 7% QoQ to RMB 4.4bn, driven by higher sales volume but lower average selling prices (down about RMB 8,200 or 5% QoQ).
• Earnings & Growth: BYD remains one of few Chinese automakers with robust net profit growth; however, FY24E may see reduced sales and profit momentum due to intensifying NEV competition. Full-year 2023E sales volume forecast slightly higher at 2.9mn units, with margin pressure expected despite expense cuts.
• Valuation & Rating: Maintain HOLD rating, with target price raised to HK$240 (up from HK$230), based on revised valuation using 25x FY24E P/E.
• Risks: Primary concerns include NEV sales volume and margin changes, potential overcapacity in FY24E, and sector re-rating.

Stock Performance: 12-month price range HK$161.70–333.00; absolute return of 2.5%–8.6% over short periods.
Market Position: BYD holds ~35% market share in NEV segment, but faces competition that may erode growth engines in future years.

Conclusion: Short-term earnings resilience supported by strong Q2 projections, but long-term outlook cautious due to competitive pressures and slower export contributions.