31 October 2025 | 6:57AM CST Equity Research BYD Co. (002594.SZ): 3Q25 First Take: Below expectation on declining sales volume but margin improvement qoq on cost reduction BYD reported below-expected 3Q25 results on both revenue and net profit. Key areas of surprise: Negatives: (1) revenue was -3% yoy/qoq and -11% vs. GSe. With no segment breakdown provided, we believe this is partly due to -2%/-3% yoy/qoq sales volume decline coupled with product mix shifting to lower-priced models in the quarter (e.g. Yua ...

Group 1 - The Hang Seng Index opened down 0.07%, and the Hang Seng Tech Index fell by 0.65%, with Alibaba and Xiaomi Group dropping over 1%, and BYD Company falling over 3% with a net profit of 7.823 billion yuan, a year-on-year decline of 32.6% [1] Group 2 - Guotai Junan Securities suggests that a significant style shift may occur in the Hong Kong stock market in the fourth quarter, with low-growth sectors like Hang Seng Tech potentially becoming relatively favorable [2] - According to China Merchants Securities, the recent adjustments in the Hong Kong stock market have been overly reactive to external shocks, and a rebound is expected as trade tensions ease and incremental policies provide marginal benefits [2] - Galaxy Securities indicates that the overall valuation of the Hong Kong stock market is at a historically high level, predicting wide fluctuations in the market, and recommends focusing on sectors such as precious metals and dividend assets [2] Group 3 - Huatai Securities reports that southbound capital has accumulated inflows exceeding 500 billion HKD since the second half of the year, but the momentum may slow down as the year-end assessment period approaches [3] - The sentiment indicators have returned to neutral, indicating that while there is balanced risk, high-risk investors may gradually build positions, but significant accumulation may still require waiting for better timing [3]

Group 1 - Jiangbolong announced significant stock price fluctuations, stating that its fundamentals have not changed, with a static P/E ratio of 229.31 times, higher than industry peers [1] - BYD reported a third-quarter net profit of 7.823 billion yuan, a year-on-year decline of 32.6%, with revenue of 194.985 billion yuan, down 3.05% [1] Group 2 - Zijin Mining plans to repurchase and cancel 30,600 restricted shares due to the departure of an incentive target, with the total shares reducing from 26,577,573,940 to 26,577,543,340 [2] Group 3 - Wuliangye's third-quarter revenue was 8.174 billion yuan, down 52.66%, and net profit was 2.019 billion yuan, down 65.62% [3] - Air China intends to issue A-shares to raise no more than 20 billion yuan, with proceeds used for debt repayment and working capital [3] Group 4 - ST Yigou reported a third-quarter net profit of 24.637 million yuan, a decline of 95.78% [4] - Sinopec Capital's third-quarter net profit was 3.997 billion yuan, down 7.95% [5] Group 5 - VisiNova reported a third-quarter net loss of 561 million yuan [6][7] - Chengdu Huamei's third-quarter net profit was 26.8846 million yuan, up 83.21% [8] Group 6 - Longyuan Power's third-quarter net profit was 246 million yuan, down 46.46% [9] - Gaoxin Development's third-quarter net profit was 28.3466 million yuan, down 54.11% [9] Group 7 - China Power's third-quarter net profit was 288 million yuan, up 7.71% [11] - China Shipbuilding Defense's third-quarter net profit was 129 million yuan, up 218.53% [12] Group 8 - Bawei Storage's third-quarter net profit was 256 million yuan, up 563.77% [13] - Luxshare Precision's third-quarter net profit was 4.874 billion yuan, up 32.49% [14] Group 9 - China Electric Power plans to invest approximately 12.167 billion yuan in a pumped storage power station project in Yunnan [15] - Hainan Mining's third-quarter net profit was 31.8287 million yuan, down 77.84% [16] Group 10 - Hunan Silver's third-quarter net profit was 96.3611 million yuan, up 47.51% [18] - Huayin Power's third-quarter net profit was 150 million yuan, up 418.61% [19] Group 11 - Shunfeng Holdings adjusted its share repurchase plan to a total amount of no less than 1.5 billion yuan and no more than 3 billion yuan [23] Group 12 - ST Chenming reported a third-quarter net loss of 2.15 billion yuan, a decline of 191.02% [25] - China Merchants Heavy Industry's third-quarter net profit was 871 million yuan, down 67.52% [102]

Mergers and Acquisitions - Qingyun Technology plans to acquire a 25% stake in Zhongtong Tianhong for 37.5 million yuan [1] Earnings Disclosure - Wuliangye reported a 65.62% year-on-year decline in net profit for Q3, with revenue down 52.66% to 8.174 billion yuan [2] - BYD's Q3 net profit decreased by 32.60%, with revenue at 194.985 billion yuan, a 3.05% decline [3] - Changjiang Electric's Q3 net profit fell by 9.16%, with revenue at 29.044 billion yuan, down 7.86% [4] - Weichai Power experienced a 29.49% increase in net profit for Q3, with revenue at 57.419 billion yuan, up 16.08% [5] Shareholding Changes - Yangfan New Materials announced that shareholder Ningbo Xinfan Investment plans to reduce its stake by up to 1%, totaling no more than 2.3475 million shares [6] - Ruisheng Intelligent's controlling shareholder and vice president plan to reduce their holdings by up to 3%, totaling no more than 1.8727 million shares [7] Risk Matters - Guodun Quantum confirmed that there are no undisclosed significant information or ongoing major asset restructuring activities [8]

Core Viewpoint - Morgan Stanley analysts, including Tim Hsiao, indicated that the third-quarter performance showed improvement from the low point in the second quarter, aligning with management guidance. Despite the earnings not being particularly strong, the overall results were not surprising given the lowered market expectations [1] Group 1: Performance Analysis - The third-quarter results improved compared to the second quarter, meeting management's expectations [1] - Earnings performance was not outstanding, but the results were in line with reduced market expectations [1] Group 2: Market Sentiment and Stock Price - Investors remain cautious about BYD's market share decline in the domestic market by 2026, but recent negative factors have been absorbed by the market [1] - The stock price is expected to fluctuate around HKD 100 [1] Group 3: Future Outlook - Investors will continue to monitor BYD's overseas expansion progress and await the next major product upgrade in 2026 [1] - Attention is also on whether BYD will implement sales policies to address the 5% increase in the new energy vehicle purchase tax in 2026 [1] - The rating is maintained at overweight, with a target price set at HKD 130 [1]

Market Overview - In September, the overall market price change index was -2.64, with an average transaction price of 154,400 yuan, reflecting a month-on-month increase of 1,131 yuan or 0.74% [1] - The overall market discount change index was -0.5, with an average discount of 27,000 yuan, which increased by 428 yuan or 1.61% month-on-month [1] Segment Analysis - In the SUV market, the price change index was 1.07, with an average transaction price of 174,000 yuan, showing a month-on-month increase of 4,118 yuan or 2.42% [1] - The SUV market discount change index was -1.37, with an average discount of 25,800 yuan, which decreased by 14 yuan or 0.06% month-on-month [1] Company Developments - FAW-Volkswagen celebrated the production of its 30 millionth vehicle in Changchun on October 30 [2] - BYD's pure electric small truck T35 was globally launched at the Tokyo Motor Show, with plans for a 2026 release in Japan at a starting price of 800,000 yen (approximately 370,000 yuan) [3] - Zhejiang Li Auto Battery Co., Ltd. was established with a registered capital of 70 million yuan, focusing on battery manufacturing and electric vehicle charging infrastructure [4] Financial Performance - SAIC Motor reported a net profit of 2.083 billion yuan for Q3 2025, a year-on-year increase of 644.88%, with total revenue of 166.888 billion yuan, up 17.06% [5] - Seres reported a net profit of 2.371 billion yuan for Q3 2025, a year-on-year decrease of 1.74%, with total revenue of 48.133 billion yuan, up 15.75% [5] - BYD's Q3 revenue was 194.985 billion yuan, down 3.05% year-on-year, with a net profit of 7.823 billion yuan, down 32.60% [6]

记者丨郑康喜 焦文娟 吴晓宇 编辑丨蒋韵 近日，国家统计局发布数据，前8月我国汽车产量突破2000万辆，同比实现双位数增长。"十四五"期 间，汽车产业已跃升为中国第一经济支柱，产业链上下游生产总值约占全国GDP的10%。 迅猛发展的汽车产业，催生了一批"汽车产业大省"。从今年前8个月各省份汽车产量看，广东以177.69 万辆位居全国第二名。 汽车产量统计口径之变 2024年，广东全年汽车产量570.74万辆，位居全国第一。但从今年一季度开始，从各省汽车产量来看， 广东已不是第一名。不过，这并非意味着广东汽车产业"缩水"。 从今年开始，国家统计局正式调整了地方汽车产量的统计方式，以"生产地"作为统计口径，取代了之 前"企业法人所在地"的统计方式。近年来，出于产能扩张、市场拓展等因素的考虑，比亚迪、广汽等广 东车企逐步在省外设置生产基地，如比亚迪在合肥的"超级工厂"规划年产能132万辆，比亚迪长沙新能 源汽车产量规划总产能也达每年90万辆。 图源：新华社 21世纪经济报道记者了解到，汽车产业大省产量排名的背后是统计口径的变化。从今年开始，国家统计 局正式调整了地方汽车产量的统计方式，统计口径由此前的"企业法人所在 ...

Core Insights - The 2025 Japan Mobility Show serves as a significant platform for Japanese automakers to assert their dominance and communicate strategic signals to the global capital market [1] Group 1: Event Overview - The 2025 Tokyo Motor Show is being held at the Tokyo International Exhibition Center, featuring major Japanese brands such as Toyota, Honda, Nissan, Mitsubishi, Suzuki, and Subaru, while international brands are notably sparse [3] - BYD, as the only Chinese automaker present, launched a new pure electric K-Car model, attracting considerable attention from Japanese companies [3][4] Group 2: BYD's Strategy - BYD's participation emphasizes its commitment to building a comprehensive ecosystem of both passenger and commercial vehicles in Japan, with a focus on hybrid and pure electric models [4] - The company plans to introduce 7 to 8 models of pure electric and hybrid vehicles in Japan by 2027, having already established 66 sales points in the country [5] Group 3: Japanese Automakers' Focus - Japanese automakers are showcasing a strategy that emphasizes small and precise electric vehicles, contrasting with the larger, more comprehensive models favored by Chinese brands [9][11] - Toyota's display features innovative designs, while Honda and Nissan are focusing on compact and electric models, indicating a shift in their product strategies [11][12] Group 4: Market Dynamics - The Tokyo Motor Show reflects a divergence in strategic focus between Japanese and Chinese automakers, with Japanese brands still not fully prioritizing electrification as a central strategy [12]

Core Viewpoint - The automotive industry in China has become a crucial economic pillar, contributing approximately 10% to the national GDP, with production exceeding 20 million vehicles in the first eight months of the year, reflecting double-digit growth year-on-year [1][3]. Group 1: Automotive Production and Statistics - The National Bureau of Statistics has changed the method of calculating local automotive production from "enterprise legal person location" to "production location," impacting the rankings of provinces [3][5]. - Guangdong, which previously held the top position in automotive production for nine consecutive years, has seen a decline in its ranking due to this statistical adjustment, despite the province's automotive industry continuing to grow [5][6]. - The adjustment aims to better align with the construction of a unified national market and provides a more comprehensive understanding of regional automotive industry competitiveness [6][8]. Group 2: Guangdong's Automotive Industry Development - Guangdong is transitioning from being merely a "major automotive production province" to becoming a "major automotive industry export province," following international trends where developed automotive industries expand production capabilities abroad [6][9]. - The province's automotive industry is increasingly focused on technological competition, particularly in the field of intelligent connected vehicles, with a complete industrial chain established in this area [8]. - Guangzhou has become a leader in autonomous driving, with 1,298 test roads open for autonomous vehicles, and has achieved significant milestones in vehicle networking technology [8]. Group 3: Global Expansion and Competitiveness - Guangdong's automotive industry is leveraging its geographical advantages and deep integration with global manufacturing to expand its competitiveness internationally [9]. - Companies like Xpeng Motors and BYD are initiating localized production projects in Europe and Japan, respectively, to enhance their brand and product influence in these markets [9].

Group 1 - The Chinese government will suspend the implementation of export control measures announced on October 9 for one year, indicating the competitive strength of China's lithium battery industry chain [1] - The previous export control measures included restrictions on high-performance battery cells, lithium battery equipment, and advanced materials, aimed at limiting competitive technology exports [1] - The demand for batteries is expected to grow significantly due to the surge in data center needs driven by global AI development, benefiting the entire industry chain [1] Group 2 - The lithium battery industry has experienced prolonged losses in 2023, but recent price increases have created significant profit elasticity [2] - The core product, 6F, has seen a price increase of over 50% since September, reaching above 87,000 [2] - The demand for energy storage is accelerating, with monthly demand exceeding 120,000 tons, indicating a strong market recovery [2] Group 3 - Relevant Hong Kong stocks in the lithium battery industry include CATL, BYD, Longpan Technology, Zhongchuang Innovation, Ruipu Lanjun, and Shuangdeng [3] - Lithium mining companies mentioned are Ganfeng Lithium and Tianqi Lithium [3]