The Zhitong Finance App learned that Anxin International released a research report saying that maintaining the “buy” rating of BYD shares (01211) and is optimistic about the company's strong technical and scale advantages, it is speeding up overseas to become the world's leading NEV company, with a target price of HK$300. In April, the company sold 313,000 new energy vehicles, up 49% year on year and 3.6% month on month. Of these, 41,000 vehicles were exported, up 208% year on year and 6.7% month on month.

The report's main points are as follows:

First-quarter results are in line with expectations.

In the first quarter of 2024, BYD achieved revenue of 124.9 billion yuan, an increase of 4% year on year and a decrease of 31% month on month. Achieved net profit of 4.6 billion yuan, an increase of 11% year-on-year and a decrease of 47% month-on-month. The gross margin was 21.9%, up 4 percentage points year on year and 0.7 percentage points month on month. The net interest rate was 3.7%, up 0.2 percentage points year on year and 1.2 percentage points lower than month on month. In the first quarter, against the backdrop of BYD's price reduction offers for various models of its Dynasty and Ocean brands and the launch of Honor models, gross margin remained high. The main reasons were: 1. The scale effect of automobiles increased; 2. Prices of major raw materials were still low. 3. Increased export sales.

Sales increased year-on-month in April.

In April, BYD sold 313,000 new energy vehicles, up 49% year on year and up 3.6% month on month. Of these, 41,000 units were exported, up 208% year on year, up 6.7% month on month. The cumulative sales volume for January-April was 940,000 units, an increase of 23.2% over the previous year. The total export volume was about 139,000 vehicles, an increase of 159% over the previous year. In April, BYD's hybrid passenger car sales volume was 178,000 units, up 69% year on year, up 10% month on month, accounting for 57%; cumulative sales volume from January to April was 502,000 units, up 29% year on year. The sales volume of pure electric passenger cars in April was 134,000 units, up 29% year on year, down 4% month on month, accounting for 43%. The cumulative sales volume for January-April was 370,000 units, an increase of 18% over the previous year. In the second quarter, BYD will launch a large number of new models and launch fifth-generation DM-i hybrid technology, which will help increase sales.

BYD is the biggest beneficiary of the trade-in policy.

Recently, 7 departments including the Ministry of Commerce and the Ministry of Finance jointly issued the “Automobile Trade-In Subsidies Implementation Rules”, clarifying the financial subsidy policy for automobile trade-in. The bank expects the policy to boost the consumption of one million cars. Considering the purchasing power of the trade-in user group, it is more beneficial to mid- and low-end car sales. I believe BYD will be the biggest beneficiary of this policy.

Risk warning: Competition in the industry intensifies; prices fall short of expectations.