To The Moon

$BYD COMPANY(01211)$ , listed on the Hong Kong Stock Exchange under the ticker symbol BYD.HK, has announced its financial results for 2022. The company reported a net profit of CNY 16.62 billion, a year-on-year increase of 445.9%. It also declared a cash dividend of CNY 11.42 for every 10 shares held. BYD's revenue for 2021 was CNY 424.06 billion, a year-on-year increase of 96.2%. Its basic earnings per share stood at CNY 5.71, a year-on-year increase of 438.7%.

These impressive figures reflect the benefits BYD has derived from the Chinese government's subsidy policy for new energy vehicles, which offered CNY 10,000 to encourage people to switch from traditional fuel vehicles to electric vehicles, in order to reduce pollution. The European Union has also announced that it will stop producing fuel cars by 2030, so the Chinese government is promoting the use of new energy vehicles at an early stage. BYD has benefited significantly from this policy.

With BYD's profitability, the company has decided to reward its shareholders by offering a cash dividend of CNY 11.42 for every 10 shares held. This move aims to show appreciation for the shareholders' support and attract more investors to buy BYD shares to share in its success.

However, I must note that the company's investment threshold is high, with the current share price at CNY 211.4, and the entry fee is HKD 105,700. This fact can deter retail investors. Nevertheless, BYD's success in new energy vehicles is attributed to its strong research and development team, and the widespread use of BYD vehicles in public transportation. The company has collected vast amounts of data on the use of new energy vehicles in public transport, which enables it to detect and address issues promptly, thus increasing the reliability of its electric vehicles.

BYD's issuance of a financing tool worth CNY 50 billion abroad is an effective way of raising funds to support its research and development and expansion plans. In light of BYD's profitability, the issuance of debt serves to reassure investors of the company's ability to redeem the bonds and encourage them to buy BYD bonds.

Despite the increase in BYD's delivery rate last year, the demand for new energy vehicles has decreased due to the economic slowdown. Furthermore, the company faces strong competition from Tesla, which has reduced its prices in the US market, putting pressure on BYD. However, the cost of producing a single car is higher for BYD than for Tesla. Therefore, BYD cannot reduce prices to increase sales volume, as it may lead to losses. I believe that BYD's stock price trend will be affected by these factors and its ability to maintain its market share.

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