2）毛利率：21.9%/同比-0.2PP、环比+3.2PP；3）期间费用率：14.4%/同比+1.6PP、环比+2.6PP；4）净利润：归母116 亿元/同比+11%、环比+28%，扣非109 亿元/同比+13%、环比+27%；5）经营性现金流净额：421 亿元/同比+262 亿元、环比+381 亿元。Matters:
The company released its three-quarter report for 2024, a single quarter:
1) Revenue: 201.1 billion yuan/YoY +24%, month-on-month +14%;
2) Gross profit ratio: 21.9% /YoY -0.2PP, month-on-month +3.2PP; 3) Expense ratio for the period: 14.4% /Y+1.6PP, month-on-month +2.6PP; 4) Net profit: 11.6 billion yuan/YoY +11%, +28% month-on-month, less 10.9 billion yuan/YoY +13%, +27% month-on-month; 5) Net operating cash flow: 42.1 billion yuan/YoY +26.2 billion yuan, month-on-month +38.1 billion yuan.
Commentary:
The Q3 performance was impressive, and the net profit of the bike may have reached 0.009 million yuan. Simply omitting BYD's Q3 earnings report, the car business performance is approximately: 1) Revenue: 157.6 billion yuan/year over year +25%, month-on-month +18%; 2) gross profit margin:
25.6% /YoY -0.1PP, month-on-month +3.2PP; 3) Net profit to mother: 10.6 billion yuan/YoY +13%, +25% month-on-month.
Q3 The company's wholesale sales volume was 1.135 million vehicles, +38% YoY and +15% month-on-month. In summary, Q3's average bicycle price was 0.139 million yuan/-0.014 million yuan, month-on-month +0.003 million yuan, gross bicycle profit 0.036 million/year-on-year -0.004 million yuan, month-on-month +0.005 million yuan, bicycle net profit 0.009 million yuan/-0.002 million yuan year-on-year, and +0.001 million yuan month-on-month. Q3 showed a month-on-month upward trend in volume, price, and profit margins, or was mainly driven by the average price and profit after the release of DM 5.0.
10M24 wholesale reached a new high, and Q4 fundamentals may continue to rise. The company announced sales volume for October 2024:
1) New energy vehicles: 0.503 million/ +67%, month-on-month +20%; 2) BEV: 0.19 million/ +15%, month-on-month +15%; 3) PHEV: 0.311 million vehicles/ +129%, month-on-month +23%; 4) Lithium battery shipments: 21.0Gwh/YoY +37%, +6% month-on-month; 5) Overseas: 0.031 million vehicles/ +2% month-on-month, of which 0.028 million vehicles were exported. Benefiting from the trade-in policy to stimulate terminal consumption, the company's wholesale sales volume set a new 0.5 million record after breaking 0.4 million in September. The cumulative wholesale sales volume of 1-10M24 was 3.25 million units/year on year +36%.
Considering the peak terminal season and scale effects from November to December, the company's Q4 volume, price, and profit margin are expected to continue to increase.
Short-term fundamentals are strong, and the product structure is adjusted upward in the medium to long term. In 2024, the company achieved a record high sales volume in the context of the trade-in policy through a combination of Honor Edition (cost performance) and DM 5.0 (platform upgrade). Looking ahead to 2025, the company may use new pure electric platforms and intelligent driving as a starting point to develop mid-to-high-end product lines. Furthermore, the introduction of overseas products and production bases are also progressing steadily. The company insists on adjusting the product structure upward.
Investment advice: The DM5.0 hybrid product cycle is strong, and we insist on promoting high-end and overseas strategies in the medium to long term. Considering that the company's product cycle resonates with the trade-in subsidy policy, we have revised the 2024-2026 core forecast:
1) Sales volume: 4.32/5.24/6.04 million vehicles, +43%/+21%/+15%, original value 4.13/5.06/5.72 million vehicles; 2) Revenue: 761.5/1017.6/1217.7 billion yuan, +26%/+34%/+20% YoY; 3) Return to mother: 40/57.6/69.6 billion yuan, YoY +33%/+44%/+21%, original value 38.3/55.5/67.9 billion yuan; 4) EPS: 13.75/19.80/23.91 yuan, original value 13.18/19.06/23.35 yuan.
The company's fundamentals continue to improve. Considering that the valuation switch may occur in the next 6-12 months, 20 times PE will be given, corresponding to the target market value of 1152.1 billion yuan, and the target price of A-shares will be raised to 396.0 yuan. Considering the exchange rate and A/H premium, the target price for H shares was raised to HK$393.1, and the A/H premium was about 1.1 times. Maintain a “strong” rating.
Risk warning: NEV sales fall short of expectations, overseas progress falls short of expectations, high-end development falls short of expectations, etc.
