Description of the event

BYD announced production and sales for October. The company's overall sales volume in October was 0.503 million vehicles, +66.5% year-on-year, +19.8% month-on-month, and passenger car sales were 0.501 million units, up 66.2% year-on-year and 19.9% month-on-month.

Incident comments

Under the new vehicle and technology cycle, sales in October increased month-on-month, with sales exceeding 0.5 million units in a single month, setting a record. The company sold 0.501 million passenger cars in October, up 66.2% year on year and 19.9% month on month. From January to October 2024, cumulative passenger car sales were 3.251 million units, up 36.5% year over year. By type, sales of pure electric vehicles in October were 0.19 million units, up 14.6% year on year, up 14.9% month on month, and hybrid sales were 0.311 million units, up 129.3% year on year, up 23.1% month on month. By brand, in October, Dynasty Ocean sold 0.483 million vehicles, up 66.9% year on year, up 20.4% month on month; Tense 10,781 units, down 6.3% year on year, up 4.7% month on month; Equation Panther sold 6026 units, up 11.1% month on month; and looked up to 282 units, up -9% month on month. In terms of regions, export sales volume in October was 0.031 million vehicles, up 2.2% year on year, and down 5.5% month on month.

DM 5.0 was launched one after another, and the logic of double volume and price increases continued to be fulfilled. With the support of next-generation DM5 plug-in hybrid technology, in May 2024, the pricing of the Qin L DM-i and Navy Seal 06 DM-i was increased by 0.014 million-0.02 million compared to the Honor version, in exchange for the longer pure electric range and full life cycle economy of low-end models. In July, the new Song L DM-i and Song Plus DM-i were officially launched. The price of the new Song Plus was raised by 6,000 yuan through the DM5.0 upgrade, and bicycle profits are expected to increase further. In August, the SEAL 07 DM-i was officially launched, with major upgrades in hybrid technology and intelligence. In September, the 2025 Han DM-i, the Sea Lion 05, and the second-generation Song Pro DM-i were launched one after another. With the release of DM5 production capacity, sales continued to rise. In September, SEAL 06 DM-i sold 0.042 million units in a single month, with cumulative sales exceeding 0.12 million units. The DM5.0 technology cycle's double volume and price increase logic continued to be fulfilled. Technological upgrades and continuous facelift of major models are expected to help BYD continue to reach new highs in product sales throughout the year.

Overseas travel and high-end technology continue to gain strength, and the release of DM5.0 production capacity is expected to continue to increase sales. Overseas market development and localized production are accelerating the global electrification transformation. Currently, four major overseas factories in Thailand, Uzbekistan, Brazil, and Hungary have been formed, and newly entered countries such as Vietnam, Pakistan, and Tunisia. Looking ahead, as the overseas model matrix continues to be rich, and the DM5.0 plug-in hybrid model is launched overseas, monthly export sales are expected to increase. Currently, DM5 production capacity continues to be released, delivery is accelerated, sales are expected to continue to rise, and the DM5.0 technology cycle's double-rise logic of volume and price continues to be implemented. In terms of high-end technology, with the launch of intensive models such as the Z9GT, Z9L, N9, Panther 3, and Panther 8 in the second half of the year, performance is expected to be further released.

Technology and scale construction surpass the competitiveness of the industry, and advance overseas and high-end efforts to reach a new peak. The company will usher in a big year of new technology and new products in 2024. With the support of DM5.0 technology, Dynasty Ocean Network will usher in a facelift, continue to upgrade its product capabilities, and stand firm in the mainstream market. Tension, Looking, and Equation Panther are rich in model reserves to accelerate the deployment of the high-end market. Overseas travel continues to gain strength, and overseas channels and model matrices will be further improved. Supported by the scale effect, with overseas expansion and high-end expansion, profitability is expected to remain high without fear of competition. The company's net profit from 2024-2026 is estimated to be 38.5, 51.1, and 64.9 billion yuan, corresponding to PE 21.9X, 16.5X, and 13.0X, maintaining a “buy” rating.

Risk warning

1. Weak market demand caused sales of new energy vehicles to fall short of expectations; 2. The cost reduction of power batteries fell short of expectations.