BYD issue Profit Alert! Best NEV OEM in China?

$BYD COMPANY(01211)$ 

BYD issued a preliminary profit alert yesterday after the market closed for FY22/4Q22, showing strong results that beat consensus estimates again! The preliminary earnings for FY2022 were between RMB 16bn to 17bn, which is 12% to 19% higher than consensus. The implied 4Q22 earnings were RMB 6.7bn to 7.7bn, representing a 17% to 35% quarter-over-quarter increase.

In my view, BYD remains the most promising automaker among China's OEMs!

BYD sold ~1.86 million NEVs in 2022, a three-fold increase from the previous year’s volume, with an equal split between BEVs and PHEVs. BYD expects to sell 3 million units of its NEV in 2023, with a current order backlog of 450-500k units. Major new models for 2023 include Ocean (Jan), Frigate PHEV SUV (Apr), Seagull BEV sedan (Jul), Destroyer 07 PHEV sedan (3Q), Landing Ship PHEV MPV (4Q).

BYD's market leadership and market share position, through its competitive product pipeline, will likely result in potential growth in sales. As BYD begins exporting select NEV products to Europe, the company's overseas markets are seen as a long-term opportunity. However, initial overseas sales are expected to be limited in comparison to the company's domestic business. With the uncertain geopolitics, BYD is not actively preparing business development plan in the US at the moment. BYD aims 150k300k NEV sales to overseas, 5-10% of its total sales target in 2023.

In the battery business, BYD is expected to expand its customer portfolio to include major OEMs such as Toyota and Changan Automobile in China starting from the first quarter of 2023. This expansion is seen as another potential source of growth for the company's share price and earnings. Moreover, BYD is also working on its BYD battery business spin-off via a IPO, which is another great catalyst for the shareholders!

Despite increasing macroeconomic challenges, I remain quite confident in BYD’s growth prospects, driven by its technology leadership, favorable new product lineup and expanding presence in overseas markets. However, as per the same issue as Tesla, valuation is not cheap at all, with a forward PE multiple of more than 40x currently. As always, do proper due diligence and understand the investment thesis and valuation before entering!

@TigerStars @Daily_Discussion 


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  • LMSunshine
    ·2023-02-10
    Are you holding any EVs and which one are you most bullish for? Wanted to buy BYD but felt it was a little too late but still think it will hold greatest market share in China in the next 1-2 years.
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  • MaudNelly
    ·2023-01-31
    The battery business is one of the significant parts for EV makers.
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  • Guy
    ·2023-01-31
    Can BYD consider declining the price of its product and making more sales this year?
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  • AndreaClarissa
    ·2023-01-31
    BYD is still the NO.1 EV maker in China!
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  • Vikedios
    ·2023-01-31
    largest market share
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  • Hou Boon
    ·2023-01-31
    k
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  • melson
    ·2023-01-31
    [Happy]
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  • mey73129
    ·2023-01-31
    ok
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  • QCH
    ·2023-01-31
    k
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  • Dave Fu
    ·2023-01-31
    Ok
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  • beeechong
    ·2023-01-31
    Ok
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