Investment summary
Incident Overview
The company released its May production and sales report: In May, vehicle sales were 331,800 units, +38.13% YoY, of which 146,400 pure electric passenger cars were sold, +22.40% YoY, and 180,400 plug-in passenger cars were sold, +54.07% YoY. The cumulative sales volume for the year was 1.271,300 units, a cumulative year-on-year increase of +26.80%.
Key points of investment
Sales in May increased month-on-month, the highest in history. The company sold 331,800 cars in May, +38.13% year over year, setting a record high in a single month. By brand, Dynasty Net+Ocean Net sold 315,200 vehicles in May, +38.20%; Tension sold 12,200 vehicles, +11.07% year-on-year; looked up to sales of 0.06 million vehicles; and Equation Panther sold 0.24 million vehicles.
The fifth generation of DM technology was released, consolidating the leading position in the plug-in hybrid market. In May, plug-in hybrid passenger cars sold 184,400 units, +54.07% year-on-year, accounting for 55.70% of the company's passenger cars, and +5.73 pcts year-on-year. On May 28, the company released the fifth-generation DM hybrid technology, which achieved the world's highest engine thermal efficiency of 46.06%, the world's lowest power loss of 2.9 L in 100 kilometers, and the world's longest comprehensive battery life of 2,100 km. At the same time, it also released two models equipped with DM5.0, the Qin L and Seal 06.
In January-April, the company sold 501,900 plug-in vehicles, accounting for more than 45% of the domestic plug-in hybrid market. We believe that the release of new DM5.0 technology and the launch of new models will boost the company's plug-in hybrid sales volume and consolidate the company's leading position in the domestic plug-in hybrid market.
Overseas markets are progressing steadily, and the cumulative share of 1-5 exports has increased to 13.87%. In May, 37,500 vehicles were exported, +267.53% year-on-year, accounting for 11.30% in a single month. A total of 176,400 vehicles were exported throughout the year, +176.71% year-on-year, accounting for 13.88% of total exports. The company continues to accelerate overseas market expansion. In May, the BYD SHARK launch of the first global product pickup truck was held in Mexico City. The BYD SEAL U DM-i (domestic name is Song PLUS DM-i Champion Edition) went on sale in the European market, and also opened its first store in Riyadh, the capital of Saudi Arabia, and the first store in the Caribbean.
Investment advice
Maintain a “buy” rating. We expect the company to achieve net profit of 353.23/412.49/49,532 billion yuan in 2024-2026, +17.58%/+16.78%/+20.08% year-on-year; PE corresponding to the closing price on June 3, 2024 is 19.53X/16.72X/13.93X, respectively.
Risk warning
Macroeconomic fluctuation risk, industry development risk, market competition risk, policy change risk, raw material price fluctuation risk.