Description of the event
BYD announced production and sales for February. The company's overall sales volume in February was 122,300 units, down 36.8% year on year, down 39.3% month on month, passenger car sales were down 36.5% year on year and 39.4% month on month. Of these, pure electric sales were 54,900 units, down 39.4% year on year, down 47.9% month on month, hybrid sales were 66,800 units, down 33.8% year on year and 30.2% month on month.
Incident comments
Channel inventory continues to be adjusted and optimized, and Honor models support increased terminal demand. The company sold 121,700 passenger cars in February. Affected by the Spring Festival in February this year, the year-on-year decline was 36.5% and the month-on-month decline was 39.4%. The cumulative sales volume of passenger cars in January-February was 323,000 units, down 5.6% year on year. Terminals continue to be removed from storage. Based on the approximate risk volume for the first four weeks before February (corresponding to January 29 to February 25), domestic retail sales accumulated about 114,000 units, and channel inventory decreased by 15,000 units after deducting exports (due to retail sales being an approximate estimate, the actual storage level is expected to be higher). By brand, Dynasty Marine sold 114,400 units in February, down 38.1% year on year and 38.4% month on month; Tension sold 4598 units, down 37.2% year on year, down 49.3% month on month; Equation Leopard sold 2,310 units, down 55.6% month on month; and looked up to 780 units, down 52.8% month on month.
Looking at the subregion, export sales volume in February was 23,300 vehicles, up 55.3% year on year, and down 35.6% month on month. In mid-late February, the company intensively launched the Qin Plus, Dolphin, Han, Tang, and Song Plus Honor Editions. Take the Qin PLUS as an example. The starting price for the Honor Edition was as low as 79,800 yuan (the official guide price for the Champion Edition starts at 99,800 yuan). From February 19 to February 25, the Qin PlusDM-i reached 7,865 units per week (an average of 4,490 vehicles in the first four weeks of January). The Honor Edition further strengthens the competitiveness of existing model terminals. With inventory adjustments in place, the subsequent company's product cycle is strong, new cars and facelift models are expected to contribute to the increase, and the high-end and overseas product matrices continue to improve.
The company's sales volume is expanding rapidly, opening up space for overseas and high-end development, and its performance continues to improve. In terms of high-end technology, Equation Panbao 5 uses a new hybrid platform DMO and Yunnan-P intelligent hydraulic body control system, and the terminal is very hot. Looking up to the U8, which costs 1.08,000 yuan, is equipped with BYD Yisifang and Yunni-P intelligent hydraulic body control systems, demonstrating its technical strength. In terms of globalization, the company's overseas model matrix continues to improve, channels continue to expand, and export volume continues to reach new highs. Currently, high-end technology and overseas sales are still in the early stages of development, and their contributions at the performance level will become stronger as sales rise.
Technology drives new product cycles, and new energy leaders take off again. The company will usher in a big year of new technology and new products in 2024. With the support of the DM5.0 and e4.0 platforms, the main models of Dynasty Ocean Network will be upgraded, continuously upgraded, and stabilized in the mainstream market. Tension, Yangzheng, and Fangchengbao high-end brand models are rich in reserves, speeding up the deployment of the high-end market. Overseas travel continues to gain strength, and the overseas channel layout and model matrix will be further improved. Supported by the scale effect, with overseas expansion and high-end expansion, profitability is expected to remain high without fear of competition. The company's net profit from 2023-2025 is estimated at 303.2, 400.8, and 50.13 billion yuan, corresponding to PE 18X, 14X, and 11X, maintaining a “buy” rating.
Risk warning
1. Weak market demand caused sales of new energy vehicles to fall short of expectations; 2. The cost reduction of power batteries fell short of expectations.