Incident: BYD released a production and sales report for May 2024. In May 2024, the company sold 330,488 passenger cars, an increase of 38.2% over the previous year. As of May 2024, the company's cumulative sales volume of passenger cars reached 1266,934 units. In May 2024, the sales volume of the Company's Dynasty and Ocean Dual Network reached 315,227 units, up 38.2% year on year; the company's Tensei brand sales reached 12,223 units, up 11.1% year on year; the company looked up to the brand sales volume reached 608 units, and the Equation Panther brand sold 2,430 units. The company exported 37,499 passenger cars in May 2024, a year-on-year increase of 267.5%.
Plug-and-mix technology upgrades+sinking iterations, and the acceleration of exports to diversified development drives sales growth. We believe that the company's overall sales volume in May is in line with expectations. We expect the company's sales volume to reach 90-1 million units in the second quarter of '24, and the company's sales volume is expected to reach 360-3.7 million units in 24. Breaking down the company's sales growth drivers this year, we think there are the following major factors: 1) BYD is expected to directly benefit from the trade-in policy; 2) 24 is a big year for BYD products and technology. New products and technologies such as the Honor Edition and the DM-i5.0 platform were launched one after another, which is expected to drive sales to continue to rise. 3) In the middle and low end markets, BYD focuses on plug-and-mix and iteration. The release of DMi-5.0 is expected to further consolidate BYD's dominant position in the hybrid field. 4) Among the models exported by BYD, most of them were concentrated on some models such as the Yuan Plus and Dolphin in '23, and developed into exports to various models in '24. We expect the company's export sales volume to reach 400,000 to 500,000 vehicles this year. 5) Various models such as the Sea Lion 07 are increasing their intelligence at an accelerated pace.
Net bicycle profit was set at a low point in Q1 for the whole year, and there is strong certainty in looking forward to Q2 results. We estimate that Q1's net bicycle profit is about 7,000 yuan. We expect Q2's net bicycle profit to increase compared to Q1. We expect the net profit for the full year of '24 to reach 36.3 billion yuan.
Profit forecast and rating: We expect the company's net profit to be 363/423/53.7 billion yuan respectively in 2024-2026, corresponding EPS of 12.5/14.5/18.5 yuan, and the current stock price corresponding to 24/25/26 PE is 19.1/16.4/12.9 times, respectively. Maintain a “buy” rating.
Risk warning: Risk of majority shareholders reducing their holdings; the internationalization process falls short of expectations; capacity expansion falls short of expectations; profits fall short of expectations; industry growth falls short of expectations; industry competition intensifies.