Maintain "Buy" and the TP of HK$300.00. BYD's (the "Company") EPS for 2024-2026F are maintained at RMB11.95, RMB15.32, and RMB18.94. As the industry leader in the field of NEVs, the Company's earnings performance certainty is one the strongest during the industry consolidation process. We give the Company a PE of 21x in 2024, and maintain "Buy" rating with TP of HK$300.00.
2Q2024 results in line, with GPM declined. The Company achieved revenue of RMB301.127 bn 1H2024, a yoy increase of 15.8%; net profit attributable to the Company was RMB13.631 bn, a yoy increase of 24.4%; net profit attributable to the Company after deducting non-recurring items was RMB12.315 bn, a yoy increase of 27.0%. Among them, 2Q2024 achieved revenue of RMB176.183 bn, a yoy increase of 25.9%, and a mom increase of 41.0%; net profit attributable to the Company was RMB9.062 bn, a yoy increase of 32.8%, and a mom increase of 98.3%; net profit attributable to the Company after deducting non-recurring items was RMB8.563 bn, a yoy increase of 39.7%, and a mom increase of 128.2%. The GPM of 2Q2024 was 18.69%, which declined from 21.88% in 1Q2024; the NPM was 5.3%, which increased from 3.82% in 1Q2024. After deducting BYD Electronic's (00285 HK) profits, the estimated profit per vehicle sold in 2Q2024 was RMB8,100, an increase of about RMB2,700 mom, mainly benefiting from the Company's brand power, scale advantages, material price reductions and integrated cost control capabilities of the industrial chain.
Sales in Aug. exceeded market expectations, and the Company is the absolute leader in the PHEV market. In Aug., the Company achieved sales of 373,083 units, up 36.0% yoy and 9.5% mom. The cumulative sales in 1-8M2024 were 2,328,449 units, up 29.9% yoy. Among them, 148,470 BEVs were sold in Aug., up 2.0% yoy and 14.2% mom. The cumulative sales of BEVs in 1-8M2024 were 1,004,623 units, up 12.0% yoy. 222,384 PHEVs were sold in Aug, up 73.1% yoy and 5.5% mom. The cumulative sales of PHEVs in 1-8M2024 were 1,314,175 units, up 48.3% yoy. In Aug., the Company sold a total of 31,451 NEVs overseas, of which 30,451 were exported. According to data from the China Association of Automobile Manufacturers, in 1-7M2024, BEV sales were 3.57 mn units, up 10.1% yoy; PHEV sales were 2.361 mn units, up 84.5% yoy.
Technological iteration improves competitiveness, and new models empower overseas markets simultaneously. The fifth-generation DMI hybrid technology launched by the Company on 28 May 2024 is expected to enhance the Company's market competitiveness in the hybrid field and better achieve the demand replacement of the main price range of fuel vehicles. The new models launched by the Company recently, such as Xia, Leopard 8, and Sea Lion 05, are expected to expand new selling price ranges for the Company. Overseas, the Company's overseas sales accounted for 8.4% in Aug. Meanwhile, the Uzbekistan factory started production, and the construction of factories in Thailand, Brazil and Hungary also progressed steadily. The Company actively expands the mid-to-high-end and overseas strategies, which is expected to achieve greater growth potential.
Risks: 1) The demand for NEVs may be lower than expected; 2) the price war in the NEV industry may continue to intensify.
