Sou Hu Cai Jing·2025-09-09 14:57Core Viewpoint - BYD has been downgraded to a target price of RMB 124.5, with a "buy" rating, indicating a potential upside of 16% [2][3]. Financial Performance - BYD's revenue for Q2 2025 is projected to reach RMB 200.9 billion, representing a year-on-year growth of 14% and a quarter-on-quarter growth of 18% [2]. - The company's vehicle sales are expected to increase by 16% year-on-year and 14% quarter-on-quarter [2]. - BYD's gross margin is forecasted to be 16.3%, a decrease of 2.4 percentage points year-on-year but an increase of 3.8 percentage points quarter-on-quarter [2]. - Operating profit and net profit for BYD are estimated at RMB 5.597 billion and RMB 6.356 billion, respectively, showing declines both year-on-year and quarter-on-quarter [2]. Strategic Adjustments - The company has adjusted its strategy, leading to a more stable trend in Q3 and Q4 of this year [2]. - Strong overseas vehicle sales are expected to contribute significantly to profit growth [2]. - BYD is actively controlling costs, which is crucial for maintaining profitability [2]. Valuation Metrics - The valuation for BYD is based on a segmented approach, assigning price-to-earnings ratios of 32.0x for new energy vehicles, 21.3x for mobile and electronic businesses, and 10.0x for other businesses [3]. - The target prices correspond to a P/E ratio of 27.4x for Hong Kong shares and 30.9x for A-shares in 2025, with potential upsides of 15% and 16%, respectively [3]. Market Sentiment - In the last 90 days, 27 institutions have rated BYD, with 23 "buy" ratings and 4 "hold" ratings, indicating strong market confidence [6].