Incident: BYD announced production and sales in December 2024. In December 2024, it sold 0.509 million passenger cars, +50% year over month, +1% month on month; of these, EV 0.208 million vehicles, +9% year on month, +5% month on month, DM 0.302 million units, +102% year over year, -1% month on month; total annual passenger car sales were 4.25 million units, +41.1% year over year.

The company's December sales were in line with expectations. According to retail data estimates for the previous four weeks, the company's retail sales volume in December was about 0.4 million, and considering 0.057 million exports, it is estimated that 0.03-0.05 million new inventory will be added.

Basic market performance is steady: According to retail data estimates, Dynasty Ocean Network sold a total of about 0.48 million vehicles, which was basically the same; at the end of December, Qin PLUS EV, Song Pro DMI, and Sea Lion 05dmi each launched 0.01 million/0.013 million/0.013 million discounts, and all models were offered up to 5,000 yuan of insurance and a national land supplement policy. Subsequent sales are expected to continue to improve.

High-end breakthroughs continued: In December, the Equation Panther brand sold 0.011 million units, +34% month-on-month, including the Panther 5 sold 6,406 units, +26% month-on-month, and the Panther 8 sold 5012 units, +103% month-on-month; the Tension brand sold about 0.015 million units, and the 2025 Tension D9 was launched on December 26. Compared with the 2024 model, there are upgrades in power systems, smart driving, smart cabins, and seat configurations. The overall product strength has improved, which is expected to drive a recovery in sales.

Going overseas is progressing steadily: Overseas sales in December were 0.057 million vehicles, +58% year over year, and +103% month-on-month. It is expected that new models will be launched and additional Ro-Ro ships will be put into use, etc. Overseas sales totaled 0.417 million vehicles throughout the year, +72% year-on-year. Since December, breakthroughs have been made in various overseas markets. The Sea Lion 07EV was launched in Italy, 5 new cars were launched in Peru, and strategic cooperation was reached with local dealers, and officially entered the Oman and Ethiopia markets.

Outlook: The basic model will rise to the next level, and high-end & overseas markets will continue to break through 1) The basic model will rise again, and intelligence will catch up: the company's size and cost advantages are expected to continue to stand out in 2025, while downgrading the mid-level smart driving scheme to 0.1 million models to strengthen product competitiveness; 2) Continued high-end breakthroughs: Subsequent new models such as the Tensei N9 and Titanium 3 are expected to drive continuous upgrading of the sales structure and bring greater profit flexibility;

Investment advice: We expect the company's net profit to be 41.03, 55.02, and 62.12 billion yuan respectively in 2024-2026, corresponding to the current market capitalization PE of 19.2, 14.4, and 12.7 times, respectively. The company was given 18xPE in 2025, corresponding to a 6-month target price of 340.2 yuan/share, maintaining a “buy-A” rating.

Risk warning: Competition in the NEV industry has intensified; the promotion of new products has fallen short of expectations, etc.