Key investment points

October sales reached a record high of 0.5 million vehicles, up 14%. In January-October, BYD sold 3.25 million vehicles, up 36%, of which 0.503 million vehicles were sold in October, +67%/+20% year over month, including 0.031 million units sold overseas, and +2.2%/-5.5% year over month. The DM5.0 new car cycle continues to gain strength. The bottleneck in parts production capacity was eased in August, orders for Gold Nine and Silver Ten increased, and sales continued to exceed market expectations. It is expected that Q4 sales will be close to 1.4 million vehicles, with annual sales volume of 4.2 million vehicles +, of which 0.4-0.45 million vehicles will be exported. The domestic electrification rate is expected to increase further in '25, and the +e4.0 platform will delay +dmi going overseas. We expect the company to sell 5 million vehicles +, of which exports have nearly doubled to 0.8 million vehicles.

The mixed market share continued to rise, and Panther 8 officially announced its launch in November. BYD sold 0.311 million hybrid passenger cars in October, +129%/+23%, accounting for 62.1%, +18/+1.6pct; pure electric passenger cars sold 0.19 million vehicles, +15%/+15%, accounting for 37.9%, or -15.5/-1.62 pct.

In terms of high-end models, Tension sold 0.011 million units in October, with the Z9 GT selling price starting at 0.3348 million units, with a 36-hour reduction of 5,000 units; the Equation Leopard sold 6026 units, an increase of 11.1%. After the price reduction, sales increased. The Panther 8 officially announced that it will be launched in November, equipped with the Huawei Smart Car ADS3.0, which is expected to further catalyze sales. In terms of structure, in January-October, BYD sold 2.92 million vehicles domestically, up 32.5%; overseas sales of 0.329 million vehicles, up 86.9%; high-end sales of 0.144 million vehicles increased 39%; exports and high-end sales further contributed to the increase.

From January to October, the installed battery capacity was 149GWh, an increase of 28% over the same period. BYD's cumulative installed capacity in January-October was 148.7 GWh, an increase of 28%, of which 21 GWh was installed in October, +38%/+6% year-on-month. BYD's 23 years of installed capacity was 151 GWH, and the actual shipment was 185 GWH, of which 135 GWH of its own power supply, 15 GWH of external power supply, and 35 GWH of energy storage. Looking at 24 years, we expect 190 GWH of our own power supply, 25 GWh of external power supply, 50 GWh of energy storage, and actual battery shipment of 270 GWh, an increase of 40-50%.

Profit forecast and investment rating: We maintain the company's 24-26 net profit forecast of 40/51/61.1 billion yuan, an increase of 33%/27%/20%, corresponding to PE 22/17/14x, and a target price of 438 yuan for 25 years, maintaining a “buy” rating.

Risk warning: Prices of raw materials fluctuate, and sales fall short of expectations.