20180723-兴业金融证券-比亚迪股份-01211.HK-Competitive_Position__Suffers_From_Subsidy_Cut_11页_485kb
报告摘要
BYD Summary
Core Content
BYD is a listed company primarily engaged in automobile business, including traditional fuel-powered vehicles and new energy vehicles (NEVs), as well as an IT business related to rechargeable batteries, handset and computer components, and assembly services. The report discusses the company's competitive position and financial outlook, particularly in light of the recent subsidy cuts for electric vehicles (EVs).
Main Points
- Subsidy Impact: BYD's financial performance in the first half of 2018 (1H18) is expected to suffer due to the cut in EV subsidies. According to management guidance, earnings could drop by 60-80% YoY. However, the second half (2H18) may show positive growth due to the new subsidy scheme implemented on 18 June and the start of NEV credit trading on 2 July.
- Revenue Growth: The report estimates a 8% rise in revenue for 1H18, driven by 102% YoY growth in electric PV sales and ASP improvements for traditional models.
- Margin Pressure: Gross and net margins are expected to decline by 3ppts and 2.7ppts, respectively. The gross profit margin (GPM) is forecasted to drop to 15.6% in 1H18 and rise to 17.4% in 2H18.
- Earnings Forecast Adjustments: The analyst has adjusted down 2017-2019 earnings forecasts by 13%, 13%, and 8%, respectively, to reflect the impact of margin pressure and subsidy cuts.
- Valuation and Target Price: The analyst maintains a NEUTRAL rating with a new target price (TP) of HKD49.20, which is a 12% upside from the current price of HKD44.00.
- Valuation Metrics: The valuation is based on SOP (standards of practice) using a 15x P/E for the traditional auto business, 27x P/E for the NEV premium, 24x P/E for the handset and battery businesses, and 12x P/E for the SkyRail business.
- Upside and Downside Risks:
- Upside risk: Expected NEV credit pricing.
- Downside risk: EV subsidy cuts.
- Battery Business: BYD recently formed a battery joint venture (JV) with Changan Automobile, which could lead to continued strength in the battery division.
- SkyRail Business: The SkyRail division is slowing down, with a 50% YoY drop in business revenue to CNY500m due to government tightening of control over the urban rail segment.
Key Financial Highlights
| Metric | Dec-16 | Dec-17 | Dec-18F | Dec-19F | Dec-20F |
|---|---|---|---|---|---|
| Total Turnover (CNYm) | 100,208 | 102,651 | 118,579 | 139,782 | 156,096 |
| Reported Net Profit (CNYm) | 5,052 | 4,066 | 3,679 | 4,880 | 5,410 |
| Recurring Net Profit (CNYm) | 5,052 | 4,066 | 3,679 | 4,880 | 5,410 |
| Recurring EPS (CNY) | 1.96 | 1.49 | 1.35 | 1.79 | 1.98 |
| DPS (CNY) | 0.58 | 0.14 | 0.13 | 0.18 | 0.20 |
| P/E (x) | 19.4 | 25.5 | 28.2 | 21.2 | 19.2 |
| P/B (x) | 1.80 | 1.68 | 1.58 | 1.47 | 1.36 |
| EV/EBITDA (x) | 7.9 | 11.5 | 9.1 | 8.0 | 7.3 |
Key Metrics
| Metric | Dec-16 | Dec-17 | Dec-18F | Dec-19F | Dec-20F |
|---|---|---|---|---|---|
| Revenue Growth (%) | 29.1 | 2.4 | 15.5 | 17.9 | 11.7 |
| Recurrent EPS Growth (%) | 71.6 | (23.8) | (9.5) | 32.7 | 10.9 |
| Gross Margin (%) | 19.0 | 17.5 | 16.7 | 17.0 | 16.9 |
| Net Profit Margin (%) | 5.0 | 4.0 | 3.1 | 3.5 | 3.5 |
Shareholder and Market Data
- Shareholders:
- Wang Chuanfu: 18.8%
- Lv Xiangyang & Zhang Changhong: 8.8%
- Berkshire Hathaway Energy: 8.2%
- Share Performance:
- YTD: -35.4%
- 1m: -9.3%
- 3m: -24.9%
- 6m: -37.4%
- 12m: -12.8%
- Market Cap: USD16,595m
- Avg Daily Turnover (HKD/USD): 297m / 38.2m
- 52-wk Price Low/High (HKD): 43.6 - 80.5
- Free Float (%): 64
- Shares Outstanding (m): 2,728
- Estimated Return: 12%
Analyst Note
- Analyst: Zhuang Dan
- Contact: +852 2103 9414 | zhuang.dan@rhbgroup.com
Peer Comparison
| Company | Ticker | Price (HKD) | Mkt Cap (US$m) | 3-mth Avg T/O (US$m) | PER Hist (x) | PER FY1 (x) | PER FY2 (x) | EPS FY1 YoY% | EPS FY2 YoY% | 3-Yr EPS CAGR (%) | PEG (x) | Div Yld Hist (%) | Div Yld FY1 (%) | P/B Hist (x) | P/B FY1 (x) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| BYD CO LTD-H | 1211 HK | 44.00 | 16,587 | 41.0 | 20.3 | 27.2 | 30.2 | -25.3 | -10.1 | -3.2 | N/A | 0.4 | 0.4 | 2.0 | 1.7 |
| HSI | - | - | - | - | 11.5 | 11.4 | 10.3 | 37.3 | 18.4 | 19.8 | 2.7 | 3.9 | 3.6 | 1.5 | 1.9 |
| CISIOO | - | - | - | - | 13.1 | 11.7 | 10.1 | -12.5 | -9.0 | -0.4 | 16.8 | 5.6 | N/A | 0.8 | N/A |
| Sector Avg (Auto) | - | - | - | - | 11.53 | 8.02 | 6.74 | 37.3 | 18.4 | 19.8 | 2.69 | 3.92 | 3.35 | 1.5 | 1.9 |
Conclusion
BYD remains competitive in EVs, electric batteries, and handset components, but faces significant margin pressure due to EV subsidy cuts. While the first half of 2018 is expected to be challenging, the second half may show improvement. The company's battery business is strong, but the SkyRail division is slowing down. The analyst maintains a NEUTRAL rating with a reduced target price, indicating caution due to the risks associated with subsidy cuts and the potential upside from NEV credit pricing.
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