Intelligent News APP learned that Citigroup released a research report stating that BYD Company Limited (01211) has raised its car sales target to at least 3.8 million vehicles this year, while the bank assumes that the best sales scenario is 4 million vehicles or more; the group also targets to export 1 million vehicles in 2025, and expects the average profit per vehicle in the second quarter of this year to improve moderately by season. The report gave a "buy" rating with a target price of HK$475 for H shares. The 90-day upward catalyst observation conducted earlier will end on the 11th of this month.

The bank pointed out that as car sales increase, BYD's average capital expenditure and research and development costs per vehicle are expected to fall, and vertical integration will also result in a significant reduction in the cost of key components. The group believes that the expansion plan will benefit from cost, vertical integration, and technology research and development, with average annual research and development costs stabilizing at 6%-7% of revenue, while sales and administrative expenses gradually decline. The group plans to launch a new version of the fifth-generation DMI hybrid technology in the next 1-2 years. The overall profitability of the group is expected to stabilize this year.

The report also quoted BYD as saying that the industry's price war is expected to continue mildly for the next 2-3 years, and the group will prioritize sales over profits, while overseas markets are growing rapidly; it also believes that Toyota will not give up the Chinese market, and is not concerned about Toyota and Volkswagen's strategies, but aims to increase the group's penetration rate in the Chinese electric vehicle market to 70%-80% in the coming years.