Incident: On January 2, 2025, the company released the December 2024 production and sales report. In December, the company's total sales volume was 0.5148 million vehicles, an increase of 41.26% over the previous year. Among them, pure electric passenger cars sold 0.208 million units in December, up 12.08% year on year, while plug-in hybrid passenger cars sold 0.302 million units in December, up 72.83% year on year. Commercial vehicle sales in December were 5,369 units, up 89.17% year over year.

Sales are growing steadily: According to the company's WeChat account, in 2024, BYD sold 4.272 million units; passenger car sales were 4.2504 million units, up 41.1% year on year; passenger car sales overseas were 0.4172 million units, up 71.9% year on year; and Fangchengbao sold 11,418 units in December, up 124.5% year on year.

Equation Baobao 8 × Huawei Qiankun Smart Driving, the first OTA officially launched: The first Panther 8 Smart Driving OTA officially launched one after another, covering the three major smart driving capabilities of “driving, parking, and obstacle avoidance”. High-speed intelligent driving pilot assistance functions can achieve intelligent lane change, automatic ramp up and down, and high-speed “0” takeover functions; intelligent parking assistance can achieve visible and recognizable parking, parking customization, and flexible selection functions; and 16 active safety obstacle avoidance functions, including actively responding to various scenarios such as light and dark changes, night glare, vehicle rollover in front of the tunnel, and ghost probes; various smart cruise assistance functions include urban lane cruise assist, high-speed lane cruise assist, and adaptive cruise assist functions.

Investment advice: We expect the company to achieve net profit of 38.615/48.011/57.084 billion yuan in 2024-2026. The corresponding PE was 20.42/16.43/13.82 times, respectively, maintaining the “gain” rating.

Risk warning: New model sales fall short of expectations; industry competition intensifies; overseas market expansion falls short of expectations.