Q3 revenue/net profit to mother reached a record high. The DM5.0 technical dividend of the Q4 peak season is expected to accelerate the release of the company's 2024 three-quarter report, achieving revenue of 502.251 billion yuan, +18.9% year over year; net profit to mother of 25.238 billion yuan, +18.1% year over year. Q3 alone achieved revenue of 201.125 billion yuan, +24.0%/+14.2%; net profit to mother of 11.607 billion yuan, +11.5%/28.1% month-on-month; sales/R&D expenses increased by 0.5 pct/1.7 pct, respectively. This is expected to be related to the increase in advertising expenses brought about by the company's new product launch and increased investment in the field of intelligence. Given that the company's DM5.0 technology is expected to enjoy long-term dividends, the continuous layout of overseas markets, the full development of high-end brands, and breakthroughs in the field of intelligence, we have raised our 2024-2026 performance forecast. The net profit for 2024-2026 is estimated to be 379.5 (+20.6) /491.5 (+28.9) /595.6 (+31.1) billion yuan. The PE corresponding to the current stock price is 22.5/17.4/14.3 times. We are optimistic about the company's long-term development and maintain a “buy” rating.

DM5.0 technology brought obvious scale effects and technology premiums. Q2 Company Q2 Qiliqisheng's Q3 sales volume reached a record high of 1.135 million vehicles, +37.7%/15.0% year-on-month. Looking at the structure, Q3 was affected by a 2.4 pct month-on-month decline in overseas sales, and high-end brand Tenshi's sales volume fell 14.5% month-on-month. Despite this, after excluding BYD Electronics, the company's Q3 average bicycle price/net profit was +2.2%/8.8% month-on-month to 0.1388/0.0093 million yuan, and gross margin/net profit margin was +3.2pct/0.7pct month-on-month, respectively, mainly due to: (1) DM5.0 technology accelerated their launch. Among them, the sales volume of the new Q3 Q3 Qin L/Seal 06/Song L DMI reached 0.141/0.123/0.06 million vehicles respectively, bringing significant scale dividends. Furthermore, the new model achieved a certain degree of profitability improvement on the basis of guaranteed sales; (2) Q3 sales increased 0.0049 million units month-on-month after the price reduction of the high-end model Equation Leopard 5.

“DM5.0 technology dividend+high-end brands are expected to break through+continuous overseas layout”, and the company's DM5.0 technology, which has stabilized its position as a leading new energy company, is expected to occupy a long-term technical advantage. Benefiting from the increased trade-in policy and the Q4 peak season, the company's sales volume is expected to continue to grow rapidly after production capacity climbs, thus driving the main brand's profits to continue to rise high.

At the same time, the company will accelerate the development of high-end brands to lead the brand upgrade. In particular, the field of intelligence is rapidly advancing through “self-development+cooperation”. Among them, Equation Leopard cooperates with Huawei ADS3.0, and is expected to break through rapidly in terms of team size and fleet size advantages in self-development. Currently, the 2025 Han/Navy Seal equipped with the diPilot 300 is on the market, and the Tensei Z9GT is the first to launch BAS3.0+. BYD also plans to introduce smart driving into 0.15 million class models in the next 2-3 years, fully combining it with strong cost advantages. In addition, the company will accelerate its entry into more markets around the world, introduce a rich product matrix such as plug-in hybrid models, and plan overseas production capacity to exceed one million units, with broad room for growth.

Risk warning: NEV sales, overseas development process, high-end brand development falling short of expectations, etc.