Incident: On March 26, 2024, BYD announced its 2023 annual results. The company achieved operating income of 602,315 billion yuan, a year-on-year increase of 42.04%, net profit to mother of 30.041 billion yuan, an increase of 80.72% over the previous year, and net profit after deduction of 28.462 billion yuan, an increase of 82.01% year-on-year, close to the median performance forecast.
The annual revenue performance was impressive, with the contribution of popular models: in 2023, the company achieved revenue of 602,315 billion yuan, +42.04% year over year, of which Q4 achieved revenue of 180,041 billion yuan, +15.14% year over year, and +11.03% month over month. In 2023, sales reached 3,024,400 units, up 61.9% year on year, of which 23Q4 sales were 944,800 units, up 38.24% year on year and 14.66% month on month. In 2023, the overall increase compared to the same period last year reached 1.156 million units. Popular models such as the BYD Seagull, Formula Panther 5, Tense N7/N8, and Upward U8 were launched, contributing to the start of BYD's sales. Among them, the Seagull, Seal, Dolphin, and Tense D9 models contributed 280.000 units/76,000 units/162,000 units/109,000 vehicles respectively throughout the year, contributing significantly to the sales volume of the company's popular models.
Industry terminal competition intensified, and the company's profit resilience performance was excellent: in 2023, the company achieved net profit of 30.41 billion yuan, +80.72% year over year, of which Q4 achieved net profit of 8.674 billion yuan, +18.64% year over year, and -16.70% month on month. BYD Electronics predicts net profit of 38.94-4.144 billion yuan for the full year. After deducting BYD Electronics, the four-quarter bicycle profit center is 885 million yuan, down 0.29 million yuan from the third quarter, down 0.29 million yuan from the third quarter, mainly due to reduced inventory prices, impairment losses such as contract assets of 1.41 billion yuan (23Q3:911 million yuan), and the impact of non-operating expenses of 485 million yuan (23Q3:4.23 billion yuan).
In 2023, the company achieved an average bicycle profit of 0.91 million yuan, showing excellent profit resilience in the face of increased competition in the industry.
Sales potential was released at an accelerated pace, and a new growth cycle began: the launch of the BYD Honor model in 2024 led to a further increase in the company's market share. In the 12th week of 2024 (3.18-3.24), the company's hybrid/new energy/passenger car market share was 50.0%/36.4%/16.3%, respectively. Looking ahead, under the impetus of multiple vehicle systems such as Yew, Tense, Equation Bao, Dynasty Network, and Ocean Network, BYD is expected to start a new model cycle driven by the DM-5 and next-generation E platforms. Combining overseas and high-end resonance, it is expected to achieve the sales target of 4 million vehicles. The intelligent strategy is expected to drive the intelligent transformation of BYD's many new cars.
Furthermore, with the gradual release of the influence of factors such as model replacement and inventory in the first and second quarter of 2024, the company is expected to begin a new growth cycle.
Profit forecast: In 2024-2026, we expect the company to achieve revenue of 8810.20/10670.25/1294.801 billion yuan and net profit to mother of 388.91/473.51/60.51 billion yuan, corresponding PE 16.44/13.50/10.56 times, respectively.
Risk warning: the release of new models falls short of expectations; the penetration rate of the new energy market falls short of expectations; increased competition in the industry, etc.