Ping An Securities·2024-09-26 06:03Investment Rating - The report gives a "Recommended" rating for BYD, marking its first coverage [3][5]. Core Viewpoints - BYD holds a strong position in the economy car market, with significant retail growth potential domestically. The DMi 5.0 system enhances its advantages in hybrid vehicles, with expectations of retail sales reaching 4.5 million units in the domestic economy car market [5][28]. - The overseas business is expected to further release performance potential, with overseas unit revenue estimated at around 200,000 yuan and a gross margin exceeding 30% [5][20]. - The company is projected to achieve net profits of 35.4 billion, 43.2 billion, and 50.3 billion yuan from 2024 to 2026, respectively [5][6]. Summary by Sections Company Overview - BYD has evolved into a leader in the global new energy vehicle sector, with over 3 million units sold in 2023 and ranking second globally in power battery installation [10][11]. Market Position and Strategy - BYD dominates the market for passenger cars priced below 200,000 yuan, holding nearly 20% market share in this segment, with a close to 50% share in the new energy vehicle market [23][28]. - The company has adopted a pricing strategy of "electricity cheaper than oil," which has significantly boosted sales, with a 28.8% year-on-year increase in new energy vehicle sales in the first seven months of 2024 [23][28]. Financial Performance - In 2023, BYD's automotive business revenue reached 483.5 billion yuan, accounting for 80.3% of total revenue, with a gross margin maintained around 20% [16][18]. - The net profit for 2022 and 2023 was 16.6 billion and 30 billion yuan, respectively, driven by rapid growth in new energy vehicle sales and improved unit profitability [18][20]. Product Development - The DMi 5.0 system has been launched, reinforcing BYD's leadership in hybrid technology, with multiple new models expected to replace older versions [26][27]. - The company has also expanded its product offerings in the high-end market with brands like Tengshi, Fangchengbao, and Yangwang, targeting different consumer segments [30][31]. Overseas Expansion - BYD's overseas business is anticipated to grow, with the company investing in production facilities abroad to mitigate trade barriers and enhance profitability [5][20].