BYD(SZ:002594)2024-11-04 08:01Investment Rating - The report maintains a "Buy" rating for BYD [3][4] Core Views - BYD's sales of new energy vehicles (NEVs) have shown significant growth, leading to profit release. The company is expected to achieve NEV sales of 4 million and 5 million units in 2023 and 2024, respectively, with high certainty [3][4] - The target price for BYD shares has been raised to HKD 335.0, representing a potential upside of 21%, and for the A-shares to RMB 357.7, indicating a potential upside of 23% [3][4] Financial Performance Summary - In Q3 2024, BYD's revenue reached RMB 201.1 billion, a year-on-year increase of 24% and a quarter-on-quarter increase of 14%. The automotive-related revenue growth rate is close to the total revenue growth rate [4][11] - The gross profit margin for Q3 2024 was 21.9%, a decrease of 0.2 percentage points year-on-year but an increase of 3.2 percentage points quarter-on-quarter. The net profit for Q3 2024 was RMB 11.6 billion, up 11% year-on-year and 28% quarter-on-quarter, marking a historical high for quarterly net profit [4][11][12] - The average profit per vehicle in Q3 2024 was RMB 9,247, showing a quarter-on-quarter increase [11][12] Sales and Production Outlook - BYD's NEV sales in October reached a record high of 501,000 units. The company is expected to continue benefiting from the demand for plug-in hybrid models, particularly in the price range of RMB 100,000 to RMB 200,000 [3][4] - The report projects BYD's net profit for 2024 and 2025 to be RMB 37.3 billion and RMB 46.0 billion, respectively, with a year-on-year growth rate of 24% for both years [4][14] Valuation - The valuation is based on a sum-of-the-parts approach, assigning price-to-earnings ratios of 23.0x for NEVs, 18.0x for mobile and electronic businesses, and 13.0x for other businesses, leading to target prices of HKD 335.0 and RMB 357.7 for the respective shares [4][15]