Core Viewpoint - Goldman Sachs predicts BYD's (01211, 002594.SZ) average annual compound growth rate in profits will reach 30% from 2025 to 2028, with overseas profit contribution increasing from 21% in 2024 to 60% in 2028, maintaining a "Buy" rating with target prices of HKD 141 for H-shares and CNY 144 for A-shares [1] Group 1 - BYD's management is confident in long-term overseas expansion, targeting 1.5 million overseas sales by 2026, which will drive profit growth [1] - Despite acknowledging uncertainties in the Chinese market demand, management plans to announce key technologies and launch new products in Q1 next year, along with adopting a more flexible pricing strategy [1] - The overseas market is expected to be a key growth driver for the company over the next decade, with projected overseas sales (excluding the U.S.) reaching between 1.5 million to 3.5 million units from 2026 to 2035, driven by increased vehicle supply and improved market penetration of new energy vehicles [1] Group 2 - It is anticipated that once production capacity utilization exceeds 80%, the single-vehicle profit from overseas operations will remain above CNY 20,000, even with higher costs [1]

Summary of BYD Management Update Call Company Overview - **Company**: BYD (1211.HK) - **Industry**: New Energy Vehicles (NEV) and Battery Manufacturing - **Market Position**: Largest NEV passenger vehicle manufacturer in China and second-largest battery maker globally [19][20] Key Takeaways Financial Performance - **4Q25E Profitability**: Expected to improve QoQ despite a decline in total sales volume and blended ASP due to lower overseas sales mix. The 3Q25 gross margin improved QoQ due to cost reductions and fewer one-off negative impacts compared to 2Q25 [1][2] - **Operating Cash Flow**: Remained healthy at Rmb9 billion in 3Q25, despite a QoQ decline in accounts payable by approximately Rmb30 billion and an inventory increase of about Rmb10 billion [2] - **Total Cash Resources**: Strong at Rmb180 billion at the end of 3Q25 [2] Capital Expenditure - **4Q25E Capex**: Anticipated to decline QoQ, with a significant YoY decline expected in 2026E as production capacity meets demand [2] - **Production Capacity**: Annual production capacity planned for various factories includes Thailand (150k units), Brazil (150k), and Hungary (150k) [10] Sales and Market Expansion - **2026E Overseas Sales Target**: Management targets 1.5-1.6 million units, up from over 900k units in 2025E. 10M25 overseas sales reached 781k units, reflecting a 130% YoY growth [3] - **Regional Sales Insights**: - **Europe**: Expected to account for ~30% of total overseas sales, with sales doubling YoY. Plans to launch more PHEV models in Europe next year [3] - **Latin America and Asia Pacific**: Anticipated robust sales growth, with NEV penetration currently below 10% [3] New Product Development - **2026E New Technology**: Expected to be a disruptive innovation, addressing user pain points more effectively than previous technologies [4] - **Product Pricing Strategy**: More flexible pricing based on customer demand, with recent launches of large-battery PHEV products maintaining previous pricing [16] Risks and Challenges - **Potential Risks**: Include weaker-than-expected NEV sales, slower ramp-up of the Skyrail business, prolonged capex cycles, and unexpected cash flow issues [22][24] - **Impact of Subsidy Phase-Out**: Management believes BYD can leverage its strong balance sheet and cash flow to navigate the phase-out of NEV purchase tax subsidies [12] Inventory and Production Efficiency - **Current Domestic Inventory**: Slightly more than one month, with expectations for a decline in absolute inventory amounts in Dec-2025E and Jan-2026E [17] - **D&A Expense**: Expected to remain stable YoY in 2025E, with a potential decline per car in 2026E [13] Market Valuation - **Target Price**: HK$174.00, implying an expected share price return of 82.4% and a total return of 83.8% [5][21] - **Market Capitalization**: Approximately HK$869.78 billion (US$111.87 billion) [5] Conclusion - BYD is positioned for growth with strong financials, expanding overseas sales, and innovative product development. However, it faces risks related to market dynamics and regulatory changes. The management's proactive strategies and robust cash flow are expected to mitigate these challenges.

Summary of BYD Co. (002594.SZ) Management Call Company Overview - **Company**: BYD Co. (002594.SZ) - **Industry**: Electric Vehicles (EV) and New Energy Vehicles (NEV) Key Takeaways from the Management Call 1. **Overseas Expansion Strategy**: - Management is confident in long-term overseas expansion with a target of 1.5 million units in 2026, which is expected to drive higher profits despite demand uncertainty in China [1][2][3] - The company emphasizes strong sales channels, relationships with local distributors, and early product launches as competitive advantages in overseas markets [1][6] 2. **Profit Expectations**: - Management believes the profit trough is behind, expecting overseas operations to yield unit profits exceeding RMB 20,000 [1][2] - Forecasts indicate that overseas profit contribution will rise from 21% in 2024 to 60% by 2028, with a projected earnings CAGR of 30% from 2025 to 2028 [2][8] 3. **Sales Performance**: - Sales volume exceeded 3.7 million units in the first ten months of 2025, marking a 14% year-over-year increase, driven by premium brands and overseas expansion [5] - The company anticipates total export volume of 1.5 million units in 2026, a 60% increase from 2025 estimates [5][6] 4. **Market Dynamics**: - The overseas market is expected to be a key growth driver over the next decade, with NEV penetration entering a mass-adoption phase [2][6] - BYD's competitive product offerings are expected to enhance market share, particularly in regions with low EV penetration [6] 5. **Production and Cost Strategy**: - Local production is crucial for competitiveness, especially in regions with high tariffs, such as Europe and Brazil [7] - The company plans to launch key technology upgrades and adopt a more flexible pricing strategy in response to market pressures in China [1][7] 6. **Technological Developments**: - A significant technology/product launch is scheduled for Q1 2026, aimed at enhancing efficiency and reducing costs [1][7] - The company has slowed its promotion of autonomous driving features due to inventory management and regulatory constraints [7] 7. **Other Business Segments**: - BYD is also a leading player in energy storage systems (ESS) and power batteries, with rapid growth in these segments [7] Financial Projections - **Revenue Forecast**: - Projected revenues for 2026 are estimated at RMB 1,041.4 billion, with EBITDA expected to reach RMB 128.8 billion [9] - **Price Target**: - The 12-month price target is set at RMB 144 for A shares and HK$ 141 for H shares, indicating an upside potential of 48% and 44% respectively [9][8] Risks and Considerations - **Risks**: - Intensifying competition in the electric vehicle market, slower-than-expected overseas expansion, and lower-than-expected external battery sales are noted as potential risks [8] This summary encapsulates the critical insights from BYD's management call, highlighting the company's strategic focus on overseas expansion, profit expectations, and market dynamics within the electric vehicle industry.

Core Insights - BYD's stock price increased by 2.04% on November 10, reaching 99.18 CNY per share, with a total market capitalization of 904.24 billion CNY [1] - The company has seen a year-to-date stock price increase of 6.77%, but has experienced declines of 1.60% over the past five trading days, 7.99% over the past twenty days, and 5.84% over the past sixty days [1] - BYD's revenue for the first nine months of 2025 was 566.27 billion CNY, a year-on-year increase of 12.75%, while net profit attributable to shareholders decreased by 7.55% to 233.33 billion CNY [2] Financial Performance - BYD has cumulatively distributed 27.86 billion CNY in dividends since its A-share listing, with 24.41 billion CNY distributed over the past three years [3] - As of September 30, 2025, BYD's top ten circulating shareholders include Hong Kong Central Clearing Limited, which increased its holdings by 137 million shares to 265 million shares [3] Business Overview - BYD, founded on February 10, 1995, and listed on June 30, 2011, operates primarily in the electric vehicle and battery sectors, with automotive-related products accounting for 81.48% of its revenue [2] - The company is categorized under the automotive industry, specifically in electric passenger vehicles, and is involved in various concept sectors including automotive finance and ride-hailing [2]

Investment Rating - The investment rating for BYD is "Buy" and is maintained [7]. Core Insights - In Q3 2025, BYD reported revenue of 194.98 billion yuan, a year-on-year decrease of 3.1% and a quarter-on-quarter decrease of 3.0%. The net profit attributable to shareholders was 7.82 billion yuan, down 32.6% year-on-year but up 23.1% quarter-on-quarter. The net profit excluding non-recurring items was 6.89 billion yuan, down 36.6% year-on-year and up 26.9% quarter-on-quarter. The company is firmly committed to its intelligent driving transformation under its smart strategy, with the launch of the Super e platform marking a significant innovation in pure electric technology. The model lineup for high-end markets is expanding with the Tengshi, Yangwang, and Fangchengbao models. The overseas market continues to grow, with plans to enhance overseas channels and model matrix. The peak season in the second half of the year is expected to improve scale effects, and profitability is anticipated to continue to rise with the expansion of overseas markets and high-end offerings [2][5][11]. Financial Performance Summary - In Q3 2025, BYD's total sales volume was 1.114 million vehicles, showing a slight decline of 1.8% year-on-year and 2.7% quarter-on-quarter. The overseas sales volume remained high at 231,000 vehicles, with a year-on-year increase of 12.5 percentage points. The average revenue per vehicle was approximately 137,000 yuan, reflecting a slight decrease [11]. - The gross margin for Q3 2025 was approximately 17.6%, an increase of 1.3 percentage points quarter-on-quarter but a decrease of 2.5 percentage points year-on-year. The gross margin for the vehicle business was about 20.6%, up 1.9 percentage points quarter-on-quarter and down 2.7 percentage points year-on-year. The improvement in vehicle profitability was attributed to the reduction of dealer rebates, easing of terminal price wars, and ongoing cost reductions [11]. - The company expects a net profit attributable to shareholders of 35 billion yuan for 2025, corresponding to a PE ratio of 27 times, maintaining the "Buy" rating [11].

Core Insights - BYD is the only Chinese brand participating in the 2025 Tokyo Motor Show, showcasing its commitment to the Japanese market with the launch of the K-EV BYD RACCO, a custom electric vehicle designed specifically for Japan's K-Car specifications [1][3] Market Entry and Historical Context - BYD's journey in Japan began two decades ago, marked by legal battles against Sony and Sanyo over patent infringements, which it successfully navigated [2] - Since entering the Japanese passenger car market in July 2022, BYD has sold only 7,123 vehicles by early 2025, highlighting the challenges of penetrating a market dominated by local brands [3] Market Dynamics - The Japanese automotive market is heavily skewed towards domestic brands, with Toyota, Honda, and Nissan holding over 70% market share, while foreign brands account for less than 30% [3] - In 2024, the import car market shrank by 6%, with BYD selling 2,221 vehicles, a 10% increase year-on-year, indicating a slow but positive trend in a challenging environment [3][7] K-Car Segment Insights - K-Cars represent a significant segment in Japan, accounting for about one-third of total passenger car sales, with strict regulations that make them unique to the Japanese market [4] - BYD's RACCO targets the K-Car market, which is characterized by specific size and engine displacement limitations, and aims to address the pain points of traditional fuel-powered K-Cars [5] Strategic Positioning - The RACCO is expected to reduce total lifecycle costs by 40-50% compared to fuel K-Cars, despite higher electricity costs in Japan [5] - BYD's strategy includes establishing a strong presence in Japan, with 66 sales points by 2025 and a diverse product lineup [6] Challenges and Opportunities - BYD faces challenges such as low brand recognition, with only 1.3% of the new passenger car market share in Japan, and insufficient electric vehicle infrastructure [7] - The overall Japanese car market is declining, with new car sales dropping by approximately 7.5% in 2024 [7] - However, positive changes are emerging, including government plans to ban fuel vehicles by 2035 and incentives for electric vehicle owners, which may benefit BYD in the long run [7]

Group 1 - Tengshi brand, established in 2010, aims to provide a sense of safety as its core luxury standard, with significant advancements in safety features such as high-speed evasive maneuvers and AEB automatic braking [1] - The recent launch of the Tengshi N8L model has generated substantial interest, leading to a surge in orders and website traffic, causing server issues due to high demand [1] - The Equation Leopard brand is expected to achieve monthly sales of 20,000 to 30,000 units in the coming months, with projections of reaching 40,000 to 50,000 units next year [1] Group 2 - BYD's global expansion has accelerated, with overseas sales reaching 790,000 units from January to October, representing a 135% year-on-year increase [2] - The company plans to leverage the BYD mother brand as the core export brand while developing a systematic and multi-tiered international brand structure, including Tengshi and Yangwang [2]

Core Insights - The launch of the N8L marks a significant milestone for the Tengshi brand in the luxury electric vehicle market in China, showcasing the brand's growth and the successful market response with server crashes due to high order volumes [1] - Tengshi's key strengths include product safety and brand reliability, supported by BYD's backing, which enhances consumer confidence in the brand [3][5] Group 1: Product Safety - Tengshi vehicles are equipped with advanced safety features, such as high-speed evasive maneuvers without rollover, stability during high-speed tire blowouts, and automatic emergency braking (AEB), which are recognized globally [3] - The N9 model achieved a remarkable performance in the international fishhook test, passing at a speed of 210 km/h, which is over three times the international standard [3] Group 2: Brand Reliability - Established in 2010, Tengshi has a long history and strong backing from BYD, which provides technological and resource support, ensuring brand stability and consumer trust [5] - Consumers are assured of ongoing service and support, reducing concerns about brand viability and service availability post-purchase [5] Group 3: Future Outlook - Tengshi aims to focus on product production, delivery, and service excellence to ensure steady growth and market advancement [7] - BYD's other brand, Fangchengbao, is projected to achieve monthly sales of 20,000 to 30,000 units in the coming months, with potential growth to 40,000 to 50,000 units next year [8] - BYD plans to expand its presence in international markets by adapting to local conditions while maintaining a steady growth trajectory [8]

Core Viewpoint - The discussion around battery technology has intensified, with BYD's commitment to lithium iron phosphate (LFP) batteries being emphasized as a safe and reliable choice for electric vehicles [1][2] Industry Insights - The Chinese electric bus sector has seen significant advancements over the past 15 years, with a notable safety record attributed to the widespread use of LFP batteries, which have minimized incidents of electric vehicle fires [1] - The market for LFP batteries has experienced substantial growth, with a cumulative installation of 493.9 GWh from January to September this year, marking a 42.5% year-on-year increase and surpassing an 80% market share, establishing LFP as the dominant choice for electric vehicle power sources [2]

Group 1 - BYD has announced an international patent application titled "Lithium Supplementing Material for Cathode and Its Preparation Method, Cathode, Battery and Electric Device" with application number PCT/CN2025/079391, published internationally on November 6, 2025 [1] - The company has filed a total of 594 international patent applications this year, representing an increase of 88.57% compared to the same period last year [4] - In the first half of 2025, BYD invested 29.596 billion yuan in research and development, which is a year-on-year increase of 50.84% [4]