2024-09-02 08:41Investment Rating - The report maintains a "Buy" rating for BYD [11][12][13] Core Views - BYD's second-quarter sales of new energy vehicles reached 987,000 units, showing significant growth both year-on-year and quarter-on-quarter. The scale effect helps offset domestic price cuts, leading to a substantial increase in per-vehicle profit [12][15] - The report slightly raises the profit forecasts for 2024 and 2025, reflecting BYD's strong capability to defend market share and increase sales [12][13] - The target price for BYD shares is set at HKD 280.5, representing a potential upside of 16%, while the target price for the A-shares is set at RMB 297.5, indicating a potential upside of 19% [11][12][13] Financial Performance Summary - In Q2 2024, BYD's revenue reached RMB 176.2 billion, a year-on-year increase of 26% and a quarter-on-quarter increase of 41%. The automotive-related revenue growth closely matched the overall revenue growth [12][15] - The gross profit margin for Q2 2024 was 18.7%, remaining stable year-on-year but down 3.2 percentage points quarter-on-quarter. Operating profit increased by 39% year-on-year and 103% quarter-on-quarter, leading to a net profit of RMB 9.1 billion, up 33% year-on-year and 98% quarter-on-quarter [12][15] - The average profit per vehicle in Q2 2024 was RMB 8,522, which was stable year-on-year but significantly improved quarter-on-quarter [15] Revenue and Profit Forecasts - Revenue forecasts for BYD are adjusted to RMB 692.99 billion for 2024, RMB 822.90 billion for 2025, and RMB 949.33 billion for 2026, with year-on-year growth rates of 15% for 2024 and 19% for 2025 [11][16] - Net profit forecasts are raised to RMB 32.99 billion for 2024, RMB 41.38 billion for 2025, and RMB 53.23 billion for 2026, with growth rates of 10% for 2024 and 25% for 2025 [11][16] Valuation - The valuation is based on a sum-of-the-parts approach, assigning price-to-earnings ratios of 27x for new energy vehicles, 18x for mobile phone-related businesses, and 13x for other businesses, resulting in target prices of HKD 280.5 and RMB 297.5, corresponding to P/E ratios of 22.5x and 26.2x respectively [13][17]