Huachuang Securities·2025-09-02 08:48Investment Rating - The report maintains a "Strong Buy" rating for BYD, expecting it to outperform the benchmark index by over 20% in the next six months [2][17]. Core Views - The report highlights that BYD's gross margin is under pressure, primarily due to amortization and price competition, but anticipates growth driven by smart technology and international expansion [2][7]. - The target price for BYD is set at 130.6 CNY and 142.7 HKD, reflecting a valuation adjustment based on the company's current product cycle and financial performance [2][7]. Financial Summary - Revenue Forecast: Projected total revenue for 2024A is 777.1 billion CNY, with a growth rate of 29.0%. By 2027E, revenue is expected to reach 1,237.6 billion CNY, with a growth rate of 14.4% [3][8]. - Net Profit: The net profit attributable to shareholders is forecasted to be 40.3 billion CNY in 2024A, growing to 63.2 billion CNY by 2027E, with a growth rate of 23.0% in 2027E [3][8]. - Earnings Per Share (EPS): EPS is projected to increase from 4.42 CNY in 2024A to 6.94 CNY in 2027E [3][8]. - Valuation Ratios: The price-to-earnings (P/E) ratio is expected to decrease from 25 in 2024A to 16 in 2027E, while the price-to-book (P/B) ratio is projected to decline from 5.4 to 2.9 over the same period [3][8]. Market Performance - BYD's revenue for Q2 was reported at 201.9 billion CNY, showing a year-on-year increase of 14% and a quarter-on-quarter increase of 18% [7]. - The gross margin for Q2 was 16.3%, down 2.4 percentage points year-on-year and 3.8 percentage points quarter-on-quarter, indicating significant pressure from competitive pricing [7]. Strategic Outlook - The report suggests that BYD's competitive advantages, including scale, vertical integration, and sales structure, will support a recovery in profitability [7]. - The anticipated improvement in Q3 is expected to come from product mix adjustments and cost control measures, with a focus on high-end products and international markets [7].