Zhi Tong Cai Jing·2025-09-19 14:01Group 1 - The core viewpoint is that BYD is experiencing a significant profit contraction due to weak consumer demand and increased costs associated with autonomous driving technology, leading to a strategic shift towards price discipline and value competition [1] - HSBC predicts that BYD will adopt a "retreat to advance" strategy by slowing down sales growth, adjusting its annual sales forecast from 5.4 million to 4.8 million vehicles by the second half of 2025 [1] - Despite short-term pressures, HSBC remains optimistic about BYD's long-term potential, particularly in 2026, with expected sales recovery to 5.6 million vehicles driven by technological advancements and vertical integration [2] Group 2 - BYD's overseas expansion is seen as a crucial buffer against domestic pressures, with projected overseas sales exceeding 900,000 vehicles in 2025, doubling from the previous year, and maintaining over 50% growth in 2026 [3] - The overseas market accounted for 22% of BYD's total sales in the first eight months of 2025, up from 10% in 2024, highlighting its importance in supporting sales and profitability [3] - HSBC has adjusted BYD's profit expectations downward by an average of 20% for 2025-2027, but still maintains a more optimistic outlook compared to market averages, particularly due to the resilience of overseas expansion [4] Group 3 - HSBC's valuation method involves a sum-of-the-parts (SOTP) approach, leading to a new target price of 131 RMB for A-shares and 144 HKD for H-shares, indicating potential upside of 20.5% and 33.2% respectively [4] - The report emphasizes that BYD is strategically using short-term sales growth slowdown to optimize long-term competitive positioning, with a focus on avoiding price wars and enhancing technological capabilities [8] - Key catalysts for BYD include sustained demand for new models like the Seal 7, continued growth in export sales, and increased sales from high-end brands [5]