BYD released its 2023 annual report. The company achieved revenue of 602.3 billion yuan in 2023, +42% year-on-year; realized net profit of 30 billion yuan, +81% year-on-year. Among them, the fourth quarter achieved revenue of 180 billion yuan, +15% year-on-year, and +11% month-on-month; realized net profit of 8.7 billion yuan, +19% year-on-year and -17% month-on-month.
In '23, the company's share of the domestic NEV passenger vehicle market was 32%. According to data from the China Association of Automobile Manufacturers, in 2023, BYD sold about 3.2 million new cars, +62% year over year; of these, 23Q4 sold about 945,000 new cars, +38% year over year, and +15% month over month. In 2023, the company's market share in the domestic new energy passenger vehicle industry was 32%, up 4.9 pct over the same period last year.
Multiple factors contributed to the year-on-year increase in the company's net bicycle profit in '23. According to our estimates, the company's bicycle revenue in '23 was about 200,000 yuan, a year-on-year decrease of 28,000 yuan; the net profit of bicycles was 10,000 yuan, an increase of 10,000 yuan over the previous year. Among them, the company's 23Q4 bicycle revenue was 1.91 million yuan, down 38,000 yuan year on year, down 60,000 yuan from month to month; net bicycle profit was 90,000 yuan, down 20,000 yuan year on year, down 0.3 million yuan from month to month. According to the company's 2023 annual report, the passenger car business maintained good profitability thanks to increased brand power, increased overseas sales, expanded scale advantages, excellent industrial chain cost control capabilities, and falling raw material prices. We believe that the year-on-month decline in 23Q4's bicycle net profit was mainly due to the 23Q4 company's official price reduction campaign for various models and a further increase in the share of low-priced models (Seagulls selling under 100,000 yuan in 23Q4 accounted for 14.7% of the company's total sales volume, +2.2pct compared to the previous month).
Export sales increased rapidly year on year in '23, focusing on the company's overseas business. The company exported 240,000 new energy passenger vehicles in '23, an increase of 334% over the previous year, accounting for 8% of the company's total passenger car sales. In January 2024, the company exported 36,000 new energy passenger vehicles, up 248% year on year, accounting for 18% of the company's passenger car sales, reflecting a good growth trend. In 2021, the company launched a “passenger car overseas” program, developed markets in Europe, Asia Pacific, America and other regions in 2022, and actively deployed production capacity in Latin America, Central Asia and Europe in 2023. We believe that as a global leader in new energy, the company has both cost advantages and technical advantages, and that export models are highly competitive in overseas markets. As overseas expansion progresses steadily, the export business will contribute to the increase in the company's sales volume.
Profit forecast and investment advice: Considering the obvious cost advantage of the main brand in the domestic price range of 80,000 to 150,000 yuan, combined with overseas travel and high-end promotion, we expect the company to sell about 3.78 million new cars in 2024, +25% over the same period last year. The company's revenue for 2024/2025/2026 is estimated to be about 7410/8895/1068.3 billion yuan, net profit to mother about 391/481/69.8 billion yuan, and EPS of 13.43/16.53/23.99 yuan, respectively. Considering that the NEV industry is still developing rapidly, we used the PS method to value the company. The closing market value of the company on March 27, 2024 was 0.83/0.69/0.58 times the 2024/2025/2026 PS. Referring to comparable companies, we gave the company 1.0-1.1 times PS in 2024, corresponding to a reasonable market value range of 7410-815.1 billion yuan, corresponding to a reasonable value range of 254.53-279.98 yuan. Maintain an “better than the market” rating.
Risk warning: Sales of new energy vehicles fell short of expectations, and raw material prices rose sharply.