20260330-招银国际-比亚迪-002594.SZ-Overseas_sales_could_be_a_positive_surprise_in_FY26_5页_1mb

BYD (1211 HK/002594 CH) Summary

Core Content

BYD, a leading Chinese automotive and energy company, is expected to benefit significantly from rising oil prices in its overseas markets, potentially leading to a positive surprise in FY26. The report maintains a BUY rating and sets a target price of HK$125 for the Hong Kong listing and RMB125 for the Chinese listing, based on a revised P/E ratio of 23x (from prior 20x) for FY27E. This reflects improved outlook for overseas sales and energy storage segments.

Main Points

• 4Q25 Earnings Miss:

  • Revenue was in line with forecasts, but Gross Margin (GPM) narrowed by 0.2 ppts QoQ and 0.6 ppts below projections.
  • Net profit missed by 18% due to higher finance costs and lower government grants, with net profit per vehicle declining by RMB100 compared to 3Q25.

• Cash Flow Impact:

  • Operating cash flow in FY25 hit its lowest level since FY21 due to shortened payable days.
  • Net cash at the end of FY25 decreased by RMB62bn YoY.
  • Interest expense and receivable discounts increased by RMB1.3bn YoY, reducing net profit by 4%.

• Overseas Sales Outlook:

  • The report forecasts 5mn units of total sales in FY26, with 1.5mn units from overseas (a 1% YoY decline in domestic sales).
  • BYD is expected to be a major beneficiary of rising oil prices, especially in its NEV (New Energy Vehicle), photovoltaic, and energy storage battery segments.
  • Revenue is projected to grow 8.5% / 8.3% YoY in FY26-27E, with GPM largely flat at 17.8%.

• Earnings and Valuation:

  • R&D expenses grew only 9% YoY in FY25, and the capitalization ratio was 8.6%, lower than FY24's 1.8%.
  • R&D expenses are expected to rise 3% / 2% YoY in FY26-27E.
  • Government grants are expected to remain similar to FY25 levels, due to rising deferred income.
  • Net profit is projected to increase 11.3% / 20.7% YoY to RMB36.3bn / RMB43.8bn in FY26-27E.
  • P/S ratio is expected to decrease to 0.9x in FY27E, while P/E ratio is projected to be 19.5x.

Key Financial Highlights

Key Risks

• Lower-than-expected sales volume or margins.
• Sector de-rating.
• Potential changes in government grants or financial conditions.

Analyst Information

• Ji SHI, CFA

  • Contact: (852) 3761 8728
  • Email: shiji@cmbi.com.hk

• Wenjing DOU, CFA

  • Contact: (852) 6939 4751
  • Email: douwenjing@cmbi.com.hk

• Austin Liang

  • Contact: (852) 3900 0856
  • Email: austinliang@cmbi.com.hk

Stock Performance (12-Month)

Stock Data

Analyst Certification

• The research analyst certifies that the views expressed accurately reflect their personal views.
• No compensation was directly or indirectly related to the specific views in this report.
• The analyst and their associates did not trade in the stock within 30 days prior to the report and will not do so within 3 business days after the report is issued.

CMBIGM Ratings

CMB International Global Markets Limited

• Address: 45/F, Champion Tower, 3 Garden Road, Hong Kong
• Tel: (852) 3900 0888
• Fax: (852) 3900 0800
• Note: CMBIGM is a wholly owned subsidiary of CMB International Capital Corporation Limited, which is a subsidiary of China Merchants Bank.

Important Disclosures

• This report is for information purposes only and should not be considered as investment advice.
• Past performance does not guarantee future results.
• CMBIGM is not liable for any loss or damage arising from reliance on the report.
• The report may contain different assumptions and conclusions than other publications.
• CMBIGM may have investment banking relationships with the companies mentioned, which could create conflicts of interest.

Conclusion

BYD is expected to benefit from the rise in oil prices and its strong overseas presence, particularly in NEV, photovoltaic, and energy storage battery markets. Despite a 4Q25 earnings miss, the report believes the cash flow issues are temporary, and the company is poised for net profit growth in FY26-27E. The BUY rating and revised target prices reflect the improved outlook, with key risks including sales and margin underperformance and sector de-rating.