Buy BYD Stock With Automaker Poised To Benefit From Innovation, Macro Stimulus

seekingalpha2024-10-03

BYD is experiencing rapid growth in revenue and net income, propelled by strong demand for plug-in hybrids in China.The company's innovations in supply chains and driving range, along with China's ...

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overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nBuy BYD Stock With Automaker Poised To Benefit From Innovation, Macro Stimulus\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-10-03 18:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4724733-buy-byd-stock-with-automaker-poised-to-benefit-from-innovation-macro-stimulus><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>BYD is experiencing rapid growth in revenue and net income, propelled by strong demand for plug-in hybrids in China.The company's innovations in supply chains and driving range, along with China's ...</p>\n\n<a href=\"https://seekingalpha.com/article/4724733-buy-byd-stock-with-automaker-poised-to-benefit-from-innovation-macro-stimulus\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4588","symbol_name":"碎股","start_time":0,"source_url":"https://seekingalpha.com/article/4724733-buy-byd-stock-with-automaker-poised-to-benefit-from-innovation-macro-stimulus","article_id":"2472984496","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1884554112/image_1884554112.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2472984496","pubTimestamp":1727949950,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"BYD is experiencing rapid growth in revenue and net income, propelled by strong demand for plug-in hybrids in China.The company's innovations in supply chains and driving range, along with China's eco","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4588":"碎股","BYDDF":"BYD Co., Ltd.","BYDDY":"比亚迪ADR","BK4099":"汽车制造商","EVS.SI":"MSCI China Electric Vehicles and Future Mobility ETF-NikkoAM","BK4585":"ETF&股票定投概念"},"translate_title":"购买比亚迪股票，汽车制造商有望从创新和宏观刺激中受益","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BYDDF":0.9,"BYDDY":0.9,"EVS.SI":0.6},"content_text":"BYD is experiencing rapid growth in revenue and net income, propelled by strong demand for plug-in hybrids in China.The company's innovations in supply chains and driving range, along with China's economic stimulus, are likely to significantly boost its performance.BYD's Q2 revenue reached 176.2 billion yuan, with net income up 33% to 9.06 billion yuan, and vehicle sales increased by 57%.Analysts on average expect BYD's earnings per share to rise 24.4% in 2024 and 15.67% in 2025, making it a strong buy for growth investors.brunocoelhopt BYD (OTCPK:BYDDY) (OTCPK:BYDDF) is growing rapidly on the top and bottom lines, while the stock's valuation is quite attractive. Moreover, the automaker is benefiting from its innovations in the areas of supply chains and driving range. Also, importantly, the firm is being significantly helped by strong demand for plug-in hybrids, and it is well-positioned to get a meaningful lift from China's recently announced economic stimulus measures. Finally, BYD's exports should increase a great deal over the longer term. In light of all of these points, I view the shares as a buy for growth investors. Strong Growth And A Low Valuation In the second quarter, the automaker's sales soared 26% versus the same period a year earlier and 41% compared with the previous quarter to 176.2 billion Chinese yuan. (Each Chinese yuan equals 14 cents). In terms of revenue, Q2 was BYD's second-most successful quarter ever, trailing only Q4 of 2023. And its net income jumped 33% year-over-year to 9.06 billion yuan. It sold a combined total of 986,720 battery-electric vehicles (EVs) and plug-in hybrids, representing a 57% increase compared with Q1. Meanwhile, the company's EBITDA climbed to $3.93 billion last quarter from $2.26 billion during the same period of 2023. Finally, in 2024, analysts, on average, expect the firm's earnings per share to climb 24.4% to $1.69 and for 2025, the mean estimate calls for a further 15% gain to $1.94. In September, BYD sold a record total of 419,426 vehicles, representing a robust 46% increase versus the same period a year earlier. For Q3, the company handed over a combined total of over 1 million plug-in hybrids and EVs, translating to a 38% YOY jump. Given BYD's very strong growth, its forward price-to-earnings ratio of 19.85 is quite low. In fact, the automaker's forward PEG ratio, a valuation metric that factors in expected growth, is 1.42, below the sector average of 1.55. Supply Chain And Driving Range Innovations On the supply chain front, BYD is benefiting from new products developed by the BYD Shenshan Industrial Park in southern China, according to the Global Times, a newspaper controlled by China's government. And BYD's own factory at Xiaomo, China, can churn out 13 car parts every minute. Another BYD plant in the area has created its own robotic welding arm and uses automated welding arms to help complete the creation of each car body in 58 seconds. In 2023, Japan's Nikkei newspaper and Swiss bank UBS, after hiring engineers to \"tear apart and analyze\" BYD's SEAL EV, reported that the vehicle's affordability and \"exceptional performance\" were due to the effectiveness of the auto supplies that BYD manufactures itself, according to The Global Times. Liu Xueliang, general manager of BYD's Asia-Pacific auto sales division, stated that the automaker is able to sell its vehicles for low prices abroad because of the parts that it makes on its own. Somewhat corroborating Global Times' report, multinational tech research firm ABI Research recently ranked the automaker first in the EV sector based on \"nine criteria spanning categories like battery technology, platform design, coverage of different vehicle segments, and electrified share of sales.\" And in May, BYD rolled out new plug-in hybrid technology with record engine thermal efficiency and the lowest fuel consumption of any plug-in hybrid worldwide, according to The Global Times. As a result, the system enables drivers to travel a combined 2,100 kilometers or about 1,300 miles on batteries and gasoline, representing the longest range for any plug-in hybrid. However, two other Chinese companies - Geely and Aeolus - have launched plug-in hybrids with ranges of slightly over 2,000 kilometers. Still, since BYD plans to sell the long-range plug in hybrids for less than 100,000 yuan, or $12,850, in China and only two other automakers have similar technology, BYD should be able to sell many vehicles that utilize its new system. Strong Demand For Plug-In Hybrids And A Boost From China's Stimulus As I noted in a previous article, \"Bloomberg reported that the global sales of plug-in hybrids grew at a compound annual growth of 65% between 2019 and 2023 and came in at about 4 million in 2023.\" And in China, 1.69 million plug-in hybrids were sold in the first six months of 2024 alone. BYD is clearly benefiting tremendously from the rapidly growing appetite for plug-in hybrids as it handed over more than 222,000 of the vehicles in August, representing a 73% jump versus the same period a year earlier. And August was the sixth consecutive month that BYD sold a record number of plug-in hybrids. With the rapid growth of plug-in hybrids showing no sign of stopping or easing, BYD should keep getting big boosts from this trend. Also in August, Beijing increased the subsidies for old vehicles traded in for plug-in hybrids and EVs to 15,000 yuan from 7,000 yuan. And last month, the country slashed interest rates on mortgages by 0.5 percentage points while reducing the number of reserves that the country's banks must hold. The latter measures are likely to put much more money in the pockets of consumers and businesses, causing the purchases of discretionary items, including automobiles, to jump. Of course, BYD will benefit from this phenomenon. BYD's Exports Are Likely To Surge Over The Long Term In Q3, BYD handed over nearly 94,500 plug-in hybrids and EVs combined in overseas markets, representing a surge of nearly 33% versus the same period a year earlier. Last quarter, overseas sales closed in on 10% of its overall deliveries. Even with the automaker having to pay a tariff of about 27% in the EU and 100% in America, its vehicles should eventually prove to be very popular in both areas. Its long-range plug-in hybrid, for example, could only cost about $16,300 in the EU (I added 27% to the rough price that the company intends to charge for them in China) and $25,700 (I added 100% to the Chinese price. Meanwhile, BYD's cheapest EV, the Seagull, cost $9,700 in China as of March. That means that, with the tariffs, a new Seagull could cost only $12,300 in the EU and $19,400 in the U.S. In both regions, the EV would be extremely cheap, even with the surcharges. With BYD planning to build a $1 billion factory in Turkey that can serve the EU and a plant in Mexico that can serve the U.S., its exports are likely to boom over the long term. Risks Facing BYD China's economy, which is still reportedly facing multiple, structural issues, could enter a recession, causing the country's demand for vehicles to tumble. On Sept. 19, BYD disclosed that it was recalling almost 97,000 of its EVs to fix a manufacturing problem that could cause fires. The massive recall may diminish the demand for the company's vehicles. If President Donald Trump is reelected, he could radically increase the tariffs on Chinese EVs, effectively closing the American market to BYD. The EU and other countries may also dramatically increase their tariffs, stunting BYD's overall exports.  Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"analysis","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":1,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.4","shortVersion":"4.29.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2472984496"}