Summary of BYD Company Limited Conference Call Company Overview - **Company**: BYD Company Limited - **Industry**: Automotive, specifically focusing on electric vehicles (EVs) and new energy vehicles (NEVs) - **Date of Call**: October 16, 2025 Key Points Market Performance and Sales Projections - BYD sold approximately **700,000 units** overseas in the first nine months of 2025, aiming for a full-year target of **900,000 to 1 million units** [2] - For 2026, BYD is projected to sell **1.6 to 1.8 million cars** overseas, representing a **68-89% year-over-year increase** [2] - The forecast includes a **1.2 percentage point** year-over-year market share gain to **3.3%** in markets outside China and the US [2] Regional Market Insights - BYD's market share in Brazil, Thailand, and Australia exceeds **5%**, with over **20%** volume share among NEVs in several regions [3] - In Brazil, BYD's sales reached a record **10,000 units** in September, achieving a **5.6%** market share among passenger vehicles despite tariff hikes [13] - Thailand's market share stabilized at **6.3%** in Q3 2025, with strong sales from models like Atto 3 and Dolphin [14] - In Australia, BYD's market share reached **6.5%**, with the Sea Lion 7 being the second best-selling EV [15] - Market shares in Turkey and Indonesia retreated to **9%** and **7%** respectively, but local production is expected to start in 2026 [16] Production and Capacity Expansion - BYD has initiated production in Thailand (Q3 2024) and Brazil (Q3 2025), with plans for Hungary, Turkey, and Indonesia in 2026, potentially adding **400,000 to 500,000** units of overseas capacity [5] - The company aims to grow its overseas capacity by **50%** over the next three years [5] Financial Outlook - Profitability from overseas production is expected to be higher, with unit profits estimated at **RMB 14,000-16,000** overseas compared to **RMB 4,000-6,000** in China [6] - The stock has seen a **30% decline** since its peak in May 2025, attributed to earnings misses and guidance cuts, but inventory digestion is expected to improve soon [7] Competitive Landscape and Risks - Increased competition from peers like Geely and GWM, who are expanding their model offerings and dealership networks [4] - Rising protectionism, particularly in the EU, where regulations may require technology sharing or joint ventures with local firms [4] - Tariffs on BEV/PHEV in Brazil are set to increase to **35%** by July 2026, although local production may mitigate this impact [4] Investment Recommendation - The stock is rated as **Overweight** with a price target of **HK$130.00**, indicating a **20% upside** from the current price of **HK$108.60** [9] Additional Insights - BYD's overseas sales are crucial for its growth as domestic momentum stalls, highlighting the importance of international markets for future revenue [1] - The company is positioned to capture a significant share of the NEV market outside China and the US, with expectations that it will account for more than **one in eight** NEVs sold in these regions by 2026 [12]

Core Insights - Tesla Inc. recorded its second-highest monthly sales in China for 2025, with 71,525 units sold in September, reflecting a 25.15% month-over-month growth compared to August 2025 [2][3] - Despite the growth in September, Tesla's sales are down 0.9% year-over-year, marking the seventh consecutive month of decline [2][3] - Tesla's market share in the Battery EV sector in China is currently at 8.66%, with year-to-date retail sales at 432,704 units, down 5.97% year-on-year [3] Sales Performance - The highest sales tally for Tesla in 2025 was recorded in March, with 74,127 units sold [3] - In Europe, Tesla's sales are declining, with a reported 25% drop in the Italian market during September [4] Market Dynamics - The Chinese market is experiencing a transition towards electric vehicles (EVs), leading to decreasing profit margins for car dealers due to overcapacity and intense competition amid an EV price war [6] - Tesla has introduced affordable trim levels for the Model Y and Model 3 in the U.S., which has received mixed market reactions [5] Competitive Landscape - The UK has become the largest overseas market for rival BYD Co. Ltd., indicating increasing competition for Tesla in international markets [4] - Tesla scores well on momentum and growth metrics but has poor value ratings, while showing a favorable price trend in the short, medium, and long term [7]

Core Insights - General Motors (GM) and its joint ventures in China reported nearly 470,000 vehicle deliveries in Q3 2025, marking a 10.1% year-on-year increase, indicating sustained growth in both sales and market share in China for the second consecutive quarter [1] - Demand for new energy vehicles (NEVs) has been a significant driver of this growth, with sales of NEVs and battery electric vehicles (BEVs) increasing annually for 10 consecutive quarters since Q2 2023 [1] Group 1: NEV Portfolio and Product Launches - GM has emphasized a broad NEV portfolio in China, which includes BEVs, plug-in hybrids (PHEVs), and extended-range electric vehicles (EREVs) across major segments [2] - Buick's premium NEV sub-brand, ELECTRA, launched its first model, the ELECTRA L7, in September, built on GM's locally developed Xiao Yao super architecture [2][3] - Starting from 2025, all newly introduced Buick models in China will be NEVs, with plans to launch the flagship MPV, ENCASA, under the ELECTRA line by year-end [3] Group 2: Performance and Market Trends - GM's strong Q3 performance in China reflects broad-based growth, with senior vice president Steve Hill highlighting the steady progress made in the market [3] - In the US, GM reported an 8% increase in Q3 vehicle sales compared to the previous year, driven by demand for both electric and petrol-powered models [4] - GM set a quarterly EV sales record in the US with 66,501 deliveries, and year-to-date US EV sales reached 144,668, up 105% from a year ago [4][5]

Core Viewpoint - BYD, China's largest automaker, has experienced significant stock growth and sales expansion, positioning itself as a leading player in the electric vehicle (EV) market despite various macroeconomic challenges [1][12]. Company History - BYD began as a battery manufacturer 30 years ago, launching its automotive division in 2003 and its first electric vehicle in 2009. Berkshire Hathaway acquired a stake in BYD in 2008, which it still holds today [3]. Sales Performance - From 2009 to 2020, BYD's auto sales stagnated at around half a million vehicles annually due to competition and a focus on gas-powered vehicles. However, from 2020 to 2024, annual vehicle sales surged from 427,302 to 4,272,145, with revenue increasing more than fivefold and net income nearly tenfold [4][5]. Growth Drivers - BYD's rapid growth is attributed to the sale of EVs powered by its lithium iron phosphate "Blade" batteries, vehicle design improvements, manufacturing expansion, aggressive pricing strategies, and international market penetration [6][7]. Future Outlook - BYD anticipates growth driven by increasing overseas sales, expansion of its fast charging network, introduction of advanced AI features, and enhanced production capacity. Analysts project annual vehicle sales to rise to 5.5 million in 2025 and 6.5 million in 2026 [8][9]. Financial Projections - From 2024 to 2027, BYD's revenue and net income are expected to grow at a compound annual growth rate (CAGR) of 19% and 25%, respectively, with current valuations trading at less than 1 times sales and 17 times earnings [10]. Valuation Concerns - BYD's valuations are under pressure due to its reliance on the Chinese market, competition in the fragmented EV sector, and the potential impact of overseas expansion and price cuts on long-term margins [11]. Investment Consideration - While BYD presents a favorable growth outlook compared to other Chinese EV makers, its valuation may not increase until market stability is achieved or favorable trade agreements are established between the U.S. and China [12][13].