20250325-招银国际-比亚迪-002594.SZ-4Q24_margins_lay_foundation_for_FY25_earnings_5页_1mb

BYD (1211 HK/002594 CH) Summary

Core Content

BYD has demonstrated strong performance in its 4Q24 earnings, which have laid a solid foundation for FY25 earnings. The report highlights the company's focus on economies of scale, new models, overseas expansion, and technological advancements such as battery technology upgrades and autonomous driving (AD) catch-up. These initiatives are expected to drive sales growth and improve profitability in the coming year.

Main Points

• Earnings Performance:

  • 4Q24 revenue exceeded prior forecasts by 6%.
  • The GPM was reduced to 17.0% due to a change in accounting standards, which moved after-sales provision from selling expenses to COGS. Under previous standards, GPM would have been 21.5%, 0.9 ppts higher than the forecast.
  • Net profit beat estimates by 14%, despite a 16% increase in R&D expenses compared to expectations.

• Sales Growth Expectations:

  • FY25E sales volume is projected to increase by 23% YoY to 5.25 million units, maintaining its current EV market share in China.
  • Overseas sales are expected to double to 0.8 million units, following strong momentum in January–February 2025.
  • Premium brands (Denza, Fangchengbao, and Yangwang) are projected to deliver 0.37 million units in FY25E.

• New Models and Technology:

  • New models such as the Han L, Tang L, and Denza N9 are expected to lift ASP and GPM.
  • The 1kW fast charging technology could also boost energy storage battery sales.
  • BYD is expected to absorb AD-related costs (estimated at RMB3,000–4,000 per vehicle) if it achieves projected sales volume.

• Earnings and Valuation:

  • FY25E net profit is revised up by 8% to RMB57.5 billion, implying a net profit per vehicle of RMB10,900 (vs. RMB9,400 in FY24).
  • Target prices are raised to HK$470 for H shares and RMB440 for A shares, based on a 23x FY25E EPS, reflecting improved investor sentiment and the company’s leading position.
  • Key risks include lower sales or margins than expected and a sector de-rating.

Financial Highlights

Earnings Revision Comparison

Key Financial Ratios

Analyst Ratings

• Ratings: Both H and A shares are rated BUY.
• Target Price:
  • H share: HK$470
  • A share: RMB440
• Prior Target Price:
  • H share: HK$350
  • A share: RMB382
• Up/Downside:
  • H share: 16.5%
  • A share: 17.2%
• Current Price:
  • H share: HK$403.4
  • A share: RMB375.4

Stock Performance

Market Cap and Liquidity

Analyst Certification and Disclosures

• The research analyst certifies that the views expressed reflect personal opinions and are not influenced by compensation.
• No trading in the stock covered was done within 30 days prior to the report.
• No trading is planned for 3 business days after the report.
• Analyst is not an officer of any Hong Kong listed company covered.
• No financial interest in the listed companies.
• CMBIGM or its affiliates have investment banking relationships with the issuers covered in the report.
• There may be conflicts of interest affecting the report’s objectivity.

Risk and Disclaimer

• There are risks involved in trading securities.
• The report is not investment advice and not tailored to individual needs.
• Past performance does not guarantee future results.
• Actual events may differ materially from the report.
• Investment returns are uncertain and may fluctuate.
• No liability is assumed for any losses incurred from relying on the report.
• The report is for intended recipients only and not for public distribution.
• The information is subject to change without notice.
• CMBIGM may issue other reports with different conclusions.